The way that the White House, and by extension the administrative branch of the government has decided to redefine "recession" and imply that the economy is doing really well right now is actually scary.
These people do have huge levers that control our lives that they can pull. Their actions do have massive effects on the American economy, and by extension the economy of the rest of the world. The actions they're taking are legitimately horrifying.
I seriously don't think these people understand what the lives of normal people are actually like. The white house had the gall to put out a tweet bragging that gas prices had come down, and that this could be saving people $35/mo, and how much that is helping.
Gas if still $4.2 national average per gallon. That's HUGE, and the direct actions of the administration are to blame for this.
> and imply that the economy is doing really well right now is actually scary.
We're not seeing a decline in employment or spending. The really bad symptoms of a bad economy aren't there yet.
> Gas if still $4.2 national average per gallon. That's HUGE, and the direct actions of the administration are to blame for this.
Which direct actions? And frankly, gasoline prices do not amount to a signficant amount of spending by American families. Food and housing costs are also up and wages down (adjusted for inflation) which account for a lot more money that people actually spend than energy. However gasoline prices are also way down from a month ago, yet food/rent are still up.
It's been suggested the employment is because people are being forced to take on multiple jobs to make ends meet, not because there are more people getting jobs.
Gas affects the prices of nearly everything in the economy so I have no idea how you would conclude it's not a large portion of spending. I work in commodities and we are seeing massive price increases simply due to fuel & freight costs.
The government can stimulate employment by pumping money into its favored causes. So what you end up with is plenty of people employed but not producing things that people actually want. Unfortunately, we can't even imagine the wonders that people might have produced if their resources were instead allocated towards satisfying consumers.
There’s no official definition. It’s like saying you’re sick, you can be sick even if doctors can’t point to what’s wrong with you, and you aren’t necessarily sick even if you have a condition. The two quarters thing is just a really widely recognized rule of thumb. The idea that there’s some sort of official definition every economist agrees on is incorrect. The idea that there’s an organization that owns the word recession is also wrong.
“Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped. Nothing exists except an endless present in which the Party is always right.”
Good thing no one is rewriting definitions. “Recession” has no agreed upon definition, the federal government relies on the NBER to officially tell us if we’re in a recession. They haven’t said so yet.
Next thing they’ll go for the statistics bureau itself in order to massage the numbers closer to the source as possible, no need anymore of this Orwellian double-talk. At least that’s what they were doing in the ‘80s in the Eastern-European country while I was a kid, officially we had record maize and wheat production, in practice bread and cooking oil were rationed.
"Shell (SHEL.L) posted record results on Thursday, with a $11.5 billion second-quarter profit smashing the mark it set only three months ago, lifted by strong gas trading and a tripling of refining profit. The company also announced a $6 billion share buyback programme for the current quarter but did not raise its dividend of 25 cents per share. It said shareholder returns would remain 'in excess of 30% of cash flow from operating activities'."
What do you think this is the type of comment, which the administration also keeps making, actually means?
The subtext is: these companies are doing well, and that's a bad thing. How do you think that effects their desire to bring down costs for consumers?
And also: yeah, their profits are up, because due to the actions of the administration people are uncertain about their ability to buy this stuff in the future, and the futures cost goes up.
The question is: do you think this will accelerate us towards a a green energy future.
Her answer: yes, and that's a good thing for the following reasons.
BTW, a green energy future is one where these oil companies are out of business. The energy secretary is saying that she wants these companies to accelerate their own demise at a decreased profit, and how there eventual disappearance is a good thing.
Haven't the oil companies stated they feel its doing more right by their investor putting the money back to the shareholders than invest in a project that has a likelihood of getting shut down by the government?
they can't bc investors are scared af about what the future is. biden and his buddies been attacking oil and gas for years now then they wanna flip a switch and have everybody go back to investing in production. then 2 yrs from now they gonna go back to attacking it and straight up cancelling projects and refusing to permit shit and companies won't be able to pay off the assets.
it was a mistake to focus on attacking o&g when alternatives still aint ready yet.
yes lol but most of those just have to invest like 20% of their assets in esg or smth. esg is also more commonly exclude oil companies so they aren't the shareholders pushing that. it's kinda funny some of the big esg funds literally have energy companies as their top performing picks rn.
I’m sure both oil refinery executives and the executive branch of the us government wish that they did have that much control over gas prices. The reality is that gas prices are set by market mechanisms of an international commodity. Gas costs what it costs.
Correct, the last POTUS that did something to meaningfully impact gas/oil prices was Bush II when he invaded Iraq, and Obama a little bit when he decreased Iranian oil sanctions.
For better or worse, we don't live in anything resembling a command economy.
There is a regulatory aspect as well. The current regulatory environment is not encouraging an increase in refinery capacity, and that seems to be our current bottleneck.
This is not a value judgment as to whether this is right or wrong.
Should Joe Biden get some streamers and make a poster to show his support for oil refineries? He isn’t in charge of spending; that’s Congress. Maybe he should issue an executive order forcing oil refining capacity back online? Then you’d bitch about government overreach.
It's not lacking in integrity to point out your opponent's criticism is no longer valid, even if - especially when - that criticism was made in bad faith.
We could drill our away out of this problem, but we are not, because the the biden administration is being held hostage by the progressive left. And before you start calling me a republican, im not one, but this is just a really stupid idea because it's decisions like this that will cause republicans to be elected in 2022 and 2024 - the american public isnt going to take higher gas prices for the team to fight climate change at this point, they are going to vote people into office that will lower them. biden doesnt realize this because he is surrounded by people that think a like and are too rich to be unaffected by inflation, or he doesnt care -- either way, it
s a bad position
> Now, you could be excused for asking yourself: “Wait a second, I thought the U.S. had a bunch of oil in the Permian Basin in Texas and the Bakken Shale in North Dakota. Why the heck are we importing oil?” Turns out the answer is part chemistry and part economics.
> ...
> That’s because they take longer to process and need specialized refining equipment. This cheap, lower-quality crude comes from Canada, Venezuela and Russia, among other spots. Back in the late 1990s and early 2000s, it was the product U.S. refiners were buying.
> “A lot of refineries, especially in the Gulf Coast, made a very expensive bet to invest in this equipment that would allow them to save money on input costs by processing, you know, lower-quality crude,” said Richard Sweeney, an assistant professor of economics at Boston College.
---
We can't drill our way out of this because we can't refine the oil that we produce.
> Refiners who invested billions to turn a profit from processing cheap low-quality crude are paying unheard of premiums to find the heavy-sour grades they need. The mismatch is better news for such OPEC producers as Iraq and Saudi Arabia, who don’t produce much light-sweet, but pump plenty of the dirtier stuff.
> The U.S. was producing 11.185 million barrels of crude oil per day in 2021, compared with an average of 11.283 million barrels per day in 2020, according to data from the U.S. Energy Information Administration. The latest data shows that for the week of March 4, 2022, the U.S. is producing 11.6 million barrels per day.
> While there was a dip in oil production in February 2021 due to winter storms in Texas, said Mark Finley, a fellow in energy and global oil at Rice University in Houston, the U.S. remains the world’s biggest producer of crude oil.
> Approvals for companies to drill for oil and gas on U.S. public lands are on pace this year to reach their highest level since George W. Bush was president, underscoring President Joe Biden’s reluctance to more forcefully curb petroleum production in the face of industry and Republican resistance.
You can't look at the oil market in isolation like that. Saudi was dumping oil at that point, producing way more than necessary. So much so futures went negative. That is not the case today.
Which is not true either, as the dip we've seen over the past several weeks can attest. We've deeply tapped into our reserves (much more than expected as released yesterday) to achieve this. It seems like it might be short sighted and short lived.
Also if the president has no effect on gas prices why was ours groveling at the feet of the Saudi Prince?
Leaders have power through influence. Unless you are suggesting Biden has no influence, which in his specific case unfortunately might have some truth. But that's not generally the case with the president of the US.
Among other things, that profit owes to the fact that the price for their product was substantially higher at sale time than at the time when they bought their inputs. If your issue is that someone made a profit, then you want the market price to be lower.
I personally don't think mandating all actors to altruistically abstain from transacting at market price would be a sound policy, but that seems to be what liberals want.
I'm liberal and don't want central planning. It terrifies me that we are headed down that road at all; even seeing trial balloons for price controls. It always ends very, very badly and there's no reason to think this time would be different.
> The biggest spender, Johnson & Johnson, shelled out $17.5 billion on sales and marketing in 2013, compared with $8.2 billion for R&D. In the top 10, only Roche spent more on R&D than on sales and marketing.
That doesn't seem to contravene what was being said? The assertion was that the US (via higher prices) is what pays for the R&D. Not they they exclusively spend all the US profits on R&D. If the companies suddenly made 20 billion less, I'd expect the proportionate expense on Sales vs. R&D to stay roughly the same?
And mRNA tech came from Europe? (seems like it came from USA to me) And isn't Pfizer an American company? You're talking about the German company right? Would they have been able to do without Pfizer backing them?
Not just Europe—price controls (de jure or de facto, the latter via e.g. establishing a monopsony) are, as best I can tell, the main unifying factor in healthcare systems in the entire OECD except the US. Those systems differ a lot, but at some point and on some level, they all fall back on price controls, apparently to good effect.
Just looking through the OECD's datasets [0], I see a lot of health care quality and utilization measures missing for the US and many other OECD countries. How are you defining "good effect"?
I was able to find some incomplete data that suggests the US is pretty good on the metric of wait time, compared to many European countries and Canada:
I wrote a lot longer explanation but deleted it. Suffice it to say other systems are good enough that functionally no-one wishes they had the US system instead, and it'd sure be weird if every single other OECD state had been relying on price controls this long if they weren't having some beneficial effect.
My short-version argument would be—and I'm a little annoyed at having to explain this, because I've been explaining it to people on the Internet for 20 damn years, it's so not-hard to find this info that it's kinda difficult not to have been exposed to it, and it seems like it should be common knowledge at this point and like some folks are going way out of their way not to understand it—that the "good effect" is precisely that the US spends 50-100% more than any of these countries, per capita, and does not smoke the rest on practically every metric, instead doing a little better in some areas, a little worse in others, middle-of-the pack on others still. It sure as hell looks like we're paying a huge premium for similar outcomes, which also explains why there aren't a lot of people in other countries begging their governments to adopt a system like ours (a fact one has to explain when cherry-picking metrics to make the US look good—OK, so why aren't others rushing to copy us? At least some of them should be, if we actually do have an unambiguously better system).
The "good effect" is that other health care systems spend far less, and also don't bankrupt people over medical bills, while achieving roughly comparable results.
If I came to you and told you I had a process to produce a Tesla knock-off that produced a car a little better in some ways, a little worse in others, but pretty damn comparable, at 50-70% of what it costs Tesla to produce a car, and then showed you dozens of factories I'd already built that were demonstrably doing exactly that, you wouldn't ask me how I was defining "good effect" when I used that to describe the results of the One Weird Trick of my process. It's obvious.
Were you not aware of the vast differences in costs & accessibility between OECD healthcare systems? By which I mostly mean between the US and everyone else.
I am asking you to define "good effect" precisely because it seems to be subject to the kind of cherry picking you don't like.
I'm a median to upper-middle American, and I get great value from my healthcare. It's not obvious to me that a system that raises the experience for mean, or even the bottom end, of the distribution would be a good thing for me in many respects: emergency wait time, access to top percentile specialists, out of pocket costs, just to name a few. It also seems to me that you neglect to factor in that people of means, the world over, come to the US to access care from world leading treatments in many conditions. So they might not want American care in their country, but plenty surely want it for their own bodies.
Put simply: your "good effect" often smuggles in assumptions about which part of the curve to treat, and implicitly undervalues degradation of the status quo for others. You, as is the habit of liberals, would like to have a debate wherein your moral values about who deserves what and who should be deprived, is taken for granted. I'm sorry, it's not immediately obvious to me that a system where 10,000 people wait 6-12 months for lifesaving operations is better than one where 1,000 people can get the operation in a month and the other 9,000 might have to go into debt to do the same.
> It's not obvious to me that a system that raises the experience for mean, or even the bottom end, of the distribution would be a good thing for me in many respects
Ah—I usually assume the Rawlsian "Veil of Ignorance" POV when it comes public policy issues, personally, as I think is fairly common. Sure, if that's your perspective, literally nothing matters except how a policy affects you, personally, right now, so my analysis may not hold—but that's not an especially useful perspective from which to consider public policy when discussing it with strangers, and I'm not really sure why you'd even engage on this in public if the only thing you care about is whether a policy is good for you, right this second (circumstances are subject to change, after all)
At least you're up-front about it, rather than hiding it. I don't mind that when it's made explicit—I just also, again, don't get why you'd engage, and wonder whether you might have guessed in advance the sort of more-typical POV I was taking, so really could have understood what I meant by "good effect" without my needing to explain it. What were you trying to accomplish here?
Do you have anything other than unearned moral condescension? It is not my experience that clicking your tongue at people and badgering them to prioritize the collective over their own individual health outcomes in a healthcare policy is compelling.
So why would I engage? Because you seem to be advocating policies that would directly (and potentially negatively) affect my health outcomes, and your justification is "but you're just a statistic".
> The net profit margin of S&P 500 companies, which include energy giants such as Chevron and Exxon Mobil, in the first quarter has been running at 12.3% based on estimates and earnings reported so far, according to FactSet. That’s down from a peak of 13.1% in the second quarter of last year, but above the pre-COVID-19 level of about 11%.
As with food, they've realized the public will pay higher margins than they previously thought they could get away with.
>I personally don't think mandating all actors to altruistically abstain from transacting at market price would be a sound policy, but that seems to be what liberals want.
Ding Ding Ding!
The relevant question is why isn't there competition to drive the market price down.
If it appears that there is a monopoly or oligopoly extracting value from it's market position, the solution is diversification, not profit controls.
Profit controls just drive prices higher as companies strive to inflate their COGs
Wait until you hear about ESG which governs some trillions of dollars of assets. ESG is a way for politicians/elites to force ideology on the public without having to go through the electoral process and gaining public support. This power is exercised through the proxy of corporations. It is anything but democratic. It is totalitarian/authoritarian.
I am the last one to believe in these types of things but it is getting to a point where I feel like we're being boiled like a frog.
Climate/ESG initiatives have lost respect in my eyes, I'd like to support sensible things but this is how we'll get totalitarianism on our hands. Then there is the whole WEF agenda.
Direct actions like what? U.S. crude production is near all-time highs. Gas is expensive because ridiculous Americans will pay it and the oil companies figured that out. Shell just announced a $12 billion quarterly profit.
The only thing I want to see out of Biden on gas prices is a windfall tax on oil companies where the funds are dedicated to lithium exploration.
Direct actions like immediately cancelling the keystone XL pipeline.
Imagine you're a company which builds refining and extraction infrastructure. The government wants you to build more capacity to bring down the cost fuel, but 18 months ago. you watched them just straight up cancel a project which was already half finished.
Would you go for this? I wouldn't.
And you have a bunch of land lease contracts which allow you to extract oil. Without these contracts your business will collapse. The government has said that they won't give you any more until you use the ones you have. But again: they've spent the last 18 months cancelling projects, and talking about how we need to make a transition away from your business.
Do you trust that once you use up the remaining leases you have, that they're really going to give you more? I wouldn't trust that.
"Experts tell The Associated Press that the Keystone XL pipeline cancellation isn’t affecting what’s happening in the oil market today. It was never operational when it was shut down, and was not slated to go into service until 2023, according to a press release from TC Energy, the company constructing the project."
"Even if the Keystone XL pipeline had been completed, the amount of oil it was designed to transport would have been a drop in the bucket for U.S. demand, experts noted. The U.S. used nearly 20 million barrels of oil a day last year, while global consumption of oil was near 100 million barrels. The pipeline would have contributed less than 1% to the world supply of oil, according to AP reporting."
You are talking past parent. They are saying the cancellation is a signaling mechanism that gives them no confidence to build out new refineries and other infra that is required to lower prices.
Pandemic started in December 2019, gas prices started getting high in early 2021 after keystone was cancelled and the Biden admin began slow rolling drilling permits.
> If things returned to normal, then you can't really blame the pandemic.
We're still dealing with supply chain issues, and will for a while. The idea that you can turn the economy down 30% and back up 30% in less than a year with no lasting effects is silly.
> When this thread started the war in Ukraine was the issue.
Yes. Starting from an already-disrupted screwed-up economic baseline certainly doesn't help.
Simply put we were net oil exporters under Trump, all of the sudden we are back to begging the Saudis. Given the environmental retoric of this administration it isn't unreasonable to conclude that they had a hand in that.
What? Biden and other world government officials placed massive sanctions on Russia exports of oil. They seized hundreds of billions of dollars of their deposits at the federal reserve. Forget about the fact that his administration had already been driving up the price of fuel, this had a huge effect on the futures prices, driving them up to where they are now.
Their actions do have effects and sometimes a corrupt group of lifetime government grifters make bad decisions that have bad effects. The Orwellian framing is that nothing these people do could ever be wrong.
Open your eyes. The sanctions have done nothing to stop Russia, have driven up the cost of fuel (which benefits them, an energy exporter), and have dramatically heightened geopolitical tensions all over the world. We went from a situation where Russia was going to end up with a land bridge to Crimea, to a situation where Russia is likely going to end up controlling all of Ukraine, is substantially richer, and has driven a wedge between the US and India.
Russia has been putting out very cherry-picked data on their economy, which Western journalists have been taking at face value. They've been unable to make more PGMs, and their civilian sector is getting savaged.
Perun's Youtube channel has been a great deep-dive source into the war economy in general. If you're at all interested in how governments acquire arms, he's an indispensable watch.
TL;DW: The time for Russia to win the war was February, now it's a matter of how many people and how much wrecked steel and how much of Ukraine he wants to make into a wasteland before he says uncle.
EDIT: Because I can't reply, Good Times Bad Times is good too. They're a bit more high-level and wider scope than Perun, and I'd recommend them as well.
> a situation where Russia is likely going to end up controlling all of Ukraine
Not gonna happen. They might keep what they grabbed, especially if the West is going to continue dragging their feet and giving Ukrainians aid at the current "attrition war" rates, but they are at the peak of what they could achieve, at least at this round. The question now is - would they be able to keep it, not whether they can grab more.
9% is exceptionally high for some industries (eg, commodities or retail). For example, Wal-Mart is closer to 3%. Its not unusual to see targets of close to 4%.
I do agree with you that it isn't unexpected during a period of sanctions on a country that produces ~10% of the worldwide oil supply, though. Profits naturally will rise for the remaining players.
Oil is the textbook commodity and the expected profit margin on commodities is ~zero. That's the nature of a commodity: a good so interchangeable, with so many competing producers, that the profit margins are inevitably minimized.
The problem is that supply naturally reacts slowly and ~1/10th of the supply was removed from the global market. I've heard people act as if that's a small shift, but its really not small at all over the short term.
Not all commodities are equally recoverable at similar costs though, and in a world where we need more oil/copper/iron than can come out of the cheapest mine, there will be profit
These people do have huge levers that control our lives that they can pull. Their actions do have massive effects on the American economy, and by extension the economy of the rest of the world. The actions they're taking are legitimately horrifying.
I seriously don't think these people understand what the lives of normal people are actually like. The white house had the gall to put out a tweet bragging that gas prices had come down, and that this could be saving people $35/mo, and how much that is helping.
Gas if still $4.2 national average per gallon. That's HUGE, and the direct actions of the administration are to blame for this.