President Biden’s attack on oil refineries explains why efficient government economic planning is impossible and perhaps especially in a democratic system of governance. If he is a saint or if he is restrained by strong moral principles and a compulsive political philosophy, then a democratic ruler focuses on the next election – or, above all, on the next few elections, it is the same for a gerontocrat. . If he needed to win the next election, he would risk the future of his country, if not the planet.
Biden’s immediate political interest is that his party controls Congress after the interim term and allows him to wield more power. He rightly fears that voters, many of whom think the president is omniscient and omnipotent, will punish him for the high fuel prices caused by the war started by his Russian opponents.
The Financial times Report (“Joe Biden calls US oil refiners ‘unacceptable’ gains as war rage,” June 15, 2022):
U.S. President Joe Biden on Wednesday called on refineries not to produce more petrol, saying “their wage margins are” unacceptable “during the war.
In a letter to seven oil companies, including ExxonMobil, BP, Shell and Valero, Biden called for “immediate action” to supply more fuel and said the administration was ready to use “all reasonable and appropriate” tools to help increase supply in the near future. Expiration. “
Use the Defense Production Act? Decree price control which will create deficit and socialist waiting line? Ask the army to take responsibility for gasoline production?
The only way private oil companies can be profitable to increase production is if they can get prices and increase their profits in the short term. In the long run, of course, their surplus profits will compete in a free market. If they fear that their temporary surplus profits will be embezzled, they will never increase production, neither today nor in the next emergency; Or they will do it out of fear of “their” government, but don’t expect too much skill from coercion.
President Biden’s letter to the purveyors does little more than expose his economic ignorance and the impossibility of a democratic economic plan. Also cartoonish:
Biden wrote in his letter, “I understand that many factors contributed to the business decisions to reduce the refinery’s capacity, which occurred before I took office.”
It is unknown at this time what he will do after leaving the post. What he wants to do is clear: both want to reduce oil production in the long run, a kernel of the democratic environmentalist wants, and increase it in the short term when his political interests are needed. Like his predecessor, he is willing to say anything to promote his political interests, no matter how inappropriate.