The War On The American Consumer: Rising Gas Prices Are Just The Start

 

When I was growing up in the 1960's, we had something called "gas wars" where service stations, often located across the street from one another, would engage in price war to attract customers, even if it was just by a penny, to see who could go the lowest. That ended with OPEC's oil embargo in 1975.

Today, we're engaged in another "gas war", but  this time it's energy giants who've partnered up with government versus us---the American consumer.  If you've bought gas recently you've no doubt been stunned by the prices. People drive dozens of miles just to try and save a few pennies on the gallon.

 According to a recent survey of gas stations, one in five are now charging a minimum of $5.00 a gallon for regular and could reach $7.00 by the end of Summer in spots. Premium is going for as much as $10.00 a gallon and may reach $12.00 or higher in some places. By the way, gas prices have increased 63% increase thus far over last year (and yes, Donald Trump was still president then).

If we listen to the politicians, especially those like President Biden or Nancy Pelosi, they want to lay the blame at the feet of Russian President Putin or on China's expansionist foreign policy. A few blame the volatile stock market, while others say it's our strained energy grid, Covid, or supply chain. Some want to blame the domestic policies of President Trump or even on consumers! Anybody but them.

But what's the truth? Who's fault is it that we're paying $5.00 dollars or more for a gallon of gas? Who is responsible for the war on the American consumer? After some extensive research, I may have the answer, or rather, the answers.  A lot of other analysts happen to agree as well. Something as complex as energy production, a slumping economy, and rising prices aren't likely to have a single cause. As an aside, while I've numbered the primary causes, they are ranked in no particular order.

1. The war in Ukraine. Some analysts claim the central reason for the dramatic rise of gas prices is the war in Ukraine by Russia. Russia is a huge supplier of oil and gas, especially to Europe which receives around 40% to 60% of its supply from Russia. The countries of Estonia, Finland, Slovakia, Lithuania and Poland get 75%+ of their energy needs from Russia.  

Germany, Europe's economic engine and the world's fourth largest economy, gets as much as 70% of its oil and gas from Russia. China, the second largest economy gets about 20% (China is expected to surpass the U.S. economy within the next ten years, if not sooner). Even the U.S. gets about 8% from Russia. Europe gets 45% of its natural gas from Russian fields in West Siberia.

Ironically, every NATO member, whose job is to defend Europe against Russia are actually dependent on Russian exports. Turkey gets 45% of its oil and gas from Russia---17% of its oil and 40% of its gas.

Much of Russia's petroleum supply comes from Siberia, which has been more accessible thanks to a warming climate and melting permafrost, and increasingly from the Russian Arctic.  Russia is also accessing oil and gas from the Crimea with its vast reserve in the Black and Azov seas.

Nevertheless, Russia's invasion of Ukraine in February of 2022 has caused a disruption of not just oil and gas production, thanks primary to U.S. lead sanctions and not the war itself. Europe has adopted a partial ban on Russian oil and gas as well as shipping insurance on oil imports.  Whereas Russia is Europe's chief supplier, Europe is now more reliant on the United States, Middle East, and West Africa than ever (Turkey previously announced that it would not honor any sanctions and would continue to import Russian oil and gas). That additional demand has triggered an increase in price.

2. Covid and the Quarantine/Breakdown of the Supply System. Covid, which made its appearance in 2019, has had a devastating affect on the world's economy by bringing production to a near standstill. Shipments already in route were left severely backlogged.  However, with the ease of restrictions, ports and warehouses reopened to 30%+ more traffic but with 28% fewer workers. It's chaos.

 In what has become known as "The Great Resignation", millions have refused to go back to work for a variety of reason ranging from refusal to get the mandatory vaccine to low wages and mistreatment by management.  Many prefer the flex-hours and working from home.

In addition, because of uneven policies applied by the U.S. government, small businesses were forced to shutter during the pandemic while large mega-stores were allowed to remain open. The result has been the permanent closure of thousands of "mom and pop" businesses, which have traditionally been the backbone of our economy.

Although most Covid restrictions have been dropped, millions of jobs remain empty. There are currently 11.4 million job openings. Shelves are still empty, and shortages are still commonplace. Many businesses have reduced hours, close early, raised wages and prices (which are picked up by the consumer), and even offered same day pay as an enticement.  

To make matters worse, the supply chain is dependent on over-the-road truck drivers, many of whom are independent. However, the cost of owning one's own rig has skyrocketed; everything from the cost of insurance to the cost of diesel fuel, which has gone from an average of $2.39 a gallon in May 2020 to $5.57 in May 2022 (which increased $2.00 since the first of the year). In addition, shippers try to get by with paying less per diem or less per load and faster turnarounds, making it tougher to make a living.  

AAA has reported that this summer 81% of those surveyed plan to travel this summer. 18% by air and 39.2% by car (this was before the price increases). This would add to the demand for gas, which will again drive up prices, especially around the usual tourist destinations.

According to the U.S. Department of Transportation's Bureau of Transportation Statistics, the cost of jet fuel has jumped in price, marking an eight year high already this year.  This affects everything from the price of a ticket to the cost of shipping a package. That doesn't include a shortage of pilots or mechanics.

3. The Cancellation of the Keystone Pipeline.  You hear politicians make promises all the time about what they're going to do on their first day in office. Well, Joe Biden was one of the very few to live up to his promise, which was to cancel the Keystone Pipeline Project.

Simultaneously, he sent a message to "whomever it concerns"--- there will be no new pipelines anywhere.  Biden has also stopped the sale of leases to permit drilling on federal lands or allowing any new offshore drilling (and yes, that includes Alaska and Texas).

Biden recently quipped on the late night show "Jimmy Kimmel Live" (June 8, 2022), that oil producers are refusing to increase demand. That's a lie, even by political standards. Biden's energy plan is very simple. It's to force American's away from fossil fuels no matter the cost we have to bear. By reducing supply, he is by default triggering a rise in the price of gas and oil.

4. Breaking Our Fossil Fuel Habit. House Democrats have also made it clear that they will prohibit bank loans to any new or expansion of fossil fuels production. Biden's plan is to force American's away from fossil fuels by making it more expensive for Americans to drive unless, of course, they are willing to switch to all electric/battery or hybrid vehicles.  For most Americans, that means taking out a loan and going deeper into debt, which the majority of Americans can't afford to do (or simply unable to do).

Biden's Secretary of the Interior, Debbie Haaland, still insists that gas prices aren't high (perhaps she means by what they're going to be by the end of the year). Electric cars (aka "EV" for electric vehicles) get about 200 miles to the charge and much less during cold weather according to Consumer Reports, who also point out that charging stations are still rather rare (about 10,000 nationwide compared to about 145,000 gas stations), 1/4 aren't working at any given time.

As an aside, this 200 miles per charge is not "city" driving and it's about half the distance of the average gas consuming car, meaning we get half the mileage. While currently many of these recharging stations are free, it's anticipated that most, if not all, will carry some sort of fee as more come online. The FTC has stated that the rising prices are the result of decreasing supply and little else.

Additionally, in order to produce these "electric stations" which electric cars needs, there has to be an increase in coal and other fossil fuel production, which has to be converted into electricity. So, please tell me how that benefits the environment? How does that reduce our consumption of oil, coal, and natural gas? Finally, these same utility companies which are making billions in profits are the ones all set to cash in on this supposed transition of our energy consumption.

5. Good Old Fashion Greed. Despite the war in the Ukraine, inflation, Covid and quarantine, a broken supply system, a reduction in oil and gas production, energy companies are raking in the profits thank you very much. Chevron has seen a $6.3 million profit in the last quarter and is up $1.4 billion dollars over last year. Dutch Shell reaped a $9 billion profit while BP racked up $6.2 billion so far. Exxon Mobil reported a profit of $5.48 billion, which is double over last year.

Oil companies are seeing profits that they haven't seen in over a decade. Various public watchdog groups such as Public Citizen and BailoutWatch, has documented $56 billion in new buyback authorizations since last October as compared to a "mere" $11 billion for the previous nine month period. In fact, the top energy producers made $100 billion dollars just in the first quarter of 2022.

Meanwhile heating oil and gas, along with utilities are expected to skyrocket; all of which driving up inflation (heating oil is expected to double in price over last year) Utilities will increase between 8% and 23% over 2021 (Kentucky is expected to see a 14% increase while Indiana will see a 9% increase for instance). How does that make you feel? Good?

6. The Blind Shuffle. The "blind shuffle" was a old carnie dice game using a single dice which got its start back in the days of Vaudeville. Without going into details, it operated similar to the old shell game but involved a single dice. No matter what dice you picked, you lost. That's what's happening to the American Public. We're being played. No matter who we elect, we lose.

Biden is genuinely unconcerned with the growing inflation and paying more for less. He's equally oblivious to rising gas prices. His aim is forcing Americans into deeper debt by buying electric cars (while the ruling elite go about their business in gas guzzling and polluting  private airplanes, and big limos).

Why should Biden and the ruling Oligarchy be concerned?  He uses Trump, Republicans, climate change, Covid, the quarantine and the ruptured supply chain as excuses that the media sprinkles about like glitter. Meanwhile, the oil and gas companies are making obscene profits, along with the ruling class, which includes Congress and Wall Street, who are rolling in it too.

7. Conclusion (or the "Let Them Eat Cake" Scenario). I'm sure anyone who ever took a European History class knows the story of Marie Antoinette, the Queen of France.  For those in need of a quick refresher, the year was 1793. The peasants throughout France were revolting thanks to poverty, rising prices, unfair laws, the lack of decent food, no jobs, and substandard housing.

Marie Antoinette, like the elites of her time (including clergy) were totally oblivious to the plight of the peasants.  When asked what the peasants should do, she said "Let them eat cake" (actually it was "brioche", a expensive sweet roll), which she thought was still available and affordable. It wasn't.

That remark, which led to her beheading along with her hubby, King Louis XVI, and most of the elites, seemed to sum up the revolution. Ever since it has served as indicator of the elite's insolence and haughty distain towards the working class. Sometimes, it's not so good to be king...or queen.

The rising gas and oil prices are by design. It's being engineered. President Biden has all but said as much. The same for inflation. Biden is trying to force the American People off of fossil fuel, and at the same time, further into debt by purchasing electric cars (the average American family is  already in debt to the tune of around $155,500).  Who benefits?

The oil and gas companies, who are already making billions in profits, will make even more since they're responsible for producing the electricity needed to "fuel" the charging stations which they'll supply and/or own, which means more coal and fuel. Auto manufacturers like Elon Musk's "Tesla" benefit. Electric cars are expected to be at least a $350 billion dollar business (of the top 30 EV producers, half are headquartered in California, followed by Massachusetts, Colorado, and New York). The banks benefit thanks to low interest government loans and increased consumer debt. Who loses? You do. So do I.

Those unable to afford an electric car will either have to pay sickeningly high gas prices, curtail travel, or depend on public transportation, which you can bet will be all electric. Meanwhile, utility rates will skyrocket, forcing Americans onto "managed use" plans. "What's that?" you ask. Those are monitoring devices which are attached to your meter. They regulate and control your usage of electricity.

Expect the same thing will happen to water usage (did you know that in some locations, it's illegal to own a rain barrel? Yelp. It affects what they can charge for "runoff fees"). It's also illegal in some places to use a well for drinking purposes or have a septic tank? The water company doesn't make money.

In addition, you'll be responsible for them extending the appropriate lines to your property plus paying a connection fee!  As for solar and wind panels, while they generally work, don't look for earning an "buyback" fees from the utility companies. That's all a thing of the past.  This is how we get permanently trapped in the Corporatocracy's web, whether we like it or not. Welcome to the machine.

If you want to know more, please take a look at the links below. If you enjoyed the article, please consider passing it along to others and don't forget to subscribe. It's free! Lastly please be sure to "like" us on whatever platform you use to read A/O. It helps with the algorithms and keeps our articles in circulation. Thank you!  

 

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Jimmy Kimmel Live: President Joe Biden

Gas prices too high? It's all part of Biden's plan to eliminate fossil fuels

Oil Companies Posted Huge Profits. Here's Where The Cash Will Go (Hint: Not  Climate)

Oil giants reap record profits as war rages in Ukraine, energy prices soar: Here's how much they made

Get Ready for Another Energy Price Spike: High ElectricBills

Amid rising prices, American families fall deeper in debt

Is America Facing an Economic Collapse or New Beginning?

America seems to have entered (or better yet, stumbled) into a crisis mostly of its own making.  We've endured a pandemic which, though the government denies it, appears to have originated in China, from a Chinese lab known to be used by the Chinese military for some dubious (to say the least) research. Some will add (perhaps correctly) that the ultimate origins of the virus, may have, in fact, been created or modified here in the U.S.

On the surface, COVID-19 appears to be a flu virus which has been genetically modified to produce a slightly more potent form of the flu virus which appears to affect mainly those with weakened immune systems. In addition, the virus has the nasty little habit of continually morphing, which makes it difficult for immunologists to get ahead of the virus and produce a long term effective vaccine.

The Government's response to the virus was haphazard to put it mildly. Nevertheless, vaccines were developed and approved in record time (almost "as if" they were waiting...hum). But they're seen as suspect according to a growing number of doctors and pseudo-experts.

The result is another manufactured divide between those willing to be vaccinated and those who question the validity of the vaccines for various reasons, and have decided not to get vaccinated, at least for the time being. Frankly, if one follows common sense thinking, who's to really blame them? There are ample enough inconsistencies in the research, development, and approval process by the CDC and various labs to warrant holding off, and that's where things have gone off the rails.

The result has been governments attempting to "mandate" or, defacto "order" people to "get the jab" as the expression goes. Employers have jumped on the bandwagon (especially those with government contracts) and demanded that their current and potential employees must either get vaccinated or show proof of vaccination.

This has resulted in many believing that a "vaccine passport" is in the works, similar to the Nazi Era "KennKarte" or identification cards, which, by the way, the Soviets also required along with practically every modern era totalitarian regime. Perhaps implants are in the future?

Some go as far to claim that the vaccine itself is a ruse, and that it actually contains a magnetic tracking devise needed to bring about a diabolical one world government. Others insist that it's in reality a slow poison design to "thin out the herd", which allegedly has long been a secret goal of various elitist secret societies like the Bilderbergers or Trilateral Commission. 

Nevertheless, the whole issue of "to vaxx or not to vaxx" has further divided an already deeply divided America, and it has affected others elsewhere in the world.  Worse yet, it's causing a ripple effect that I don't think many economists (and certainly not the majority of politicians) expected.

Key to this has been the vast numbers of "help wanted" signs everywhere. It seems that nearly everyone with a business is in desperate need of employees. Some are offering unheard of starting salaries, sign on bonuses, and all sorts of other perks and gimmicks to win over new employees.

For smaller businesses, they are unable to match what the megastores can offer. The result is hardly unexpected. Closure. Bankruptcy. Meanwhile, for the rest of us, prices will go up to offset the higher costs to attract employees. Of course, their employment is contingent on them providing proof of vaccination. No proof. No job.  

Meanwhile, companies are operating understaffed, forcing those who show up to work, to work more and longer; often doing the job that previously two or even three people did. Some businesses are doing the opposite by cutting back on hours or days they're open.

How many of us have gone into a store to either find empty shelves or having to sidestep pallets of boxes parked in the middle of floor? The reason is that those few willing (and able) to work, are able to chose their hours. That means stockers, who used to work mostly at night, are now working days, meaning that something we're looking for may not be there now, but could be an 30 minutes later!

In addition, we're seeing a number of production facilities slow down, reduce hours, or periodically shut down. This reduces availability, which in turn drives up prices.  Oil and gas companies are doing this, which is forcing up gas prices, as well as heating oil with winter fast approaching.

Simultaneously, there are hundreds of ships waiting offshore to be unloaded. Each full of twenty foot containers filled with merchandise, including food in some instances; food with very specific expiration dates. The result is, again, less product available which leads to higher prices.

As for the other merchandise, including orders from overseas, consumers are unable to get what they want and producers are unable to sell product and get paid. The result is that orders get cancelled and consumers find substitutes to spend their money on, and so the vicious cycles goes round and round. But that's not the entirety of the problem.

As with other employers, they are requiring proof of vaccination. The longshoreman and dockworkers are severely shorthanded, not because solely of the virus, but because there was already a shortage. The equipment is both outdated and in short supply. Manufactures are demanding that outbound product get priority while inbound products are put in hold; often regulated to skeleton crews or no crews at all some days.

Once product is finally off loaded, sorted, palletized, and made ready for shipment, we face a shortage of truckers, pilots, and railroad personnel for the same reasons cited above. In addition, these jobs, while usually paying well and offering great benefits, are hard on the individual and their family.

 The owner/operator truck driver has been all but put out of business by government regulation and big companies, not mention incidentals like the cost of gas and insurance.  Pilots are making more flights, flying older model planes, and having less time for detailed maintenance (which brings up another point---few maintenance personnel for all the reasons previously mentioned).

The third leg of our tripod transportation system is the availability of freight trains and experienced engineers to drive them. Our rail system is, frankly, horribly outdated. The rail system itself is in need of updating. Even the rail yards are overcrowded.

There are shortages of cars and engines, not to mention maintenance staff, who, like everybody else, has to show proof of vaccination, and like everyone else, some will and will report to work while others won't and will stay home.  

Despite their power, locomotives are, on average, about 30 years old, while the freight cars are about twenty years old.  As an aside, the average age of a locomotive engineer is 46. The upside is that train routing systems are highly automated, but the human element is still needed for them to function properly.  

As for truckers, they face increase demands for quick turnarounds; dropping off one load and picking up another. Long haul or "over the road" truckers are often gone for a week at a time. They have to deal with not only imposed time management issues, but traffic delays and road work (most use a traffic routing system which helps them avoid delays which they own or is provided for by their employer))

Roads in the United States are decades past due for improvement, especially bridges. Unfortunately, most local governments can't afford the necessary repairs which can run in the millions, and opt for cheap "fixes" due to their limited budgets. While they work in the short term. they ultimately just put off what will be a more serious and expensive problem down the not-too-distant road.

The same goes for states. They're typically in a financial bind of some sort and put off resolving the problem in exchange for quick fix "solutions", despite federal money for state as well as local road use. Naturally, none of this free. It's all paid for with our taxes, and the worse it gets, the more of our money they'll take.

The COVID virus, of course, didn't cause any of this, but it did exacerbate existing problems across the board, not to mention creating more than few new ones. You could call COVID the straw that finally broke the camel's back. So, what does this mean for the rest of us? What can we expect in the future?

Employers are essentially mandating their employees be vaccinated. Can they do this legally? Well, it would appear so. Employers are using existing federal guidelines calling for safe workplaces as the basis for their demands as cover. There are exceptions of course, such as for sincere religious reasons or if there is a potential health concern triggered by the vaccine (such as complications with a pregnancy, or adverse effect to an existing condition or current medication).

The result to all this is an artificial shortage of available employees. There are more than enough skilled and willing individuals to work, they just have serious doubts about the vaccination's safety, which is a legitimate concern.

Some employers have worked around this by requiring unvaccinated employees to be tested weekly. Other employers have shifted unvaccinated workers away from customer contact as much as possible, while requiring as mask when in contact with customers.

In the interim, it's a employee's market. Employers are desperate. However, unless some accommodation acceptable to both sides of the vaccination question is reached, we'll continue to see "help wanted" signs and shortages in stores and warehouses. Meanwhile, don't be surprised to see prices across the board go up to offset higher wages and products shortages.

However, an accommodation will be reached. It has too. Unemployment last only so long; few Americans have ample savings stashed away, and there's only so much debt you can carry.  The tide will turn, and it will become a employer job market again, and when it does, watch out!

Because of the shortages, many smaller businesses will fold. That will reduce a lot of variety in the marketplace. People will be forced to buy from the Amazons of the world for that unique or hard to find item. A large number of companies will become automated, reducing the need for human "drones".

Markets will also expand to more potential customers overseas.  That, along with the continuing influx of illegal and legal immigrants, will drive wages---but not prices---down, and along with it, benefits. When possible, employers will export jobs overseas to countries like China, India, and Indonesia. 

The end result could potentially be inflation, which results where prices exceed wages. If that can't be brought under control quickly, it could be devastating to any country's economy, be it the U.S., France, Mexico, or China, just as it is currently in Venezuela or was in 1920's Germany.

There could be riots over food shortages and prices, lack of jobs, gas and heating oil, quality of life, and so forth as one group turns on the other (something the Oligarchy has been fostering for years). Just the perfect scenario for martial law. The result could be a neo-fascist police state like we've been warned about for years (including from yours truly).

We can, however, stop this from happening. Force employers and the government alike to allow us to make our own health choices. If that means multiple weekly testing and/or wearing masks and gloves, so be it. That will get ships unloaded, trucks back on the road and products on the shelves again. None of this is permanent. It too will pass.

That will get people back to work. Some may choose jobs different than they had pre-COVID. That's good to. But for some, that old job will likely be automated, so brush up on your skills, or better yet, your education by seeking out a trade school or maybe picking up a language like Spanish, Hindi, or Mandarin Chinese.  

Most Americans are in debt; some very serious debt. Those who've been playing economic chicken will be hurt the most. Don't look for relief from the government in the form of debt forgiveness or low/no interest debt consolidation loans. Don't expect prices to go back down. They won't. Same with taxes. The only thing we can do here is get laws passed requiring voter approval for all tax, fee, rate, or salary increases for public employees.

With respect to infrastructure, expect to see more joint government/corporate financing of specific roads, ports, rail lines, etc which involves corporate use in exchange for increased tax breaks and public access. There could even be more corporate influence in public education curriculum as corporations take over the role of creating a "classroom to job" graduate.

I don't know if the COVID virus was an act of Nature or Man. But from what I've seen, my money is on the latter. It hit just as things were winding down in Afghanistan and we were involved in yet another divisive election. It has provided another (manufactured) division. It has rid the economy of much of the remaining small businesses. It has created an artificial worker shortage, along with possible inflation thanks to rising prices and stagnant or falling wages. That will eventually mean fewer jobs. We can stop it. But we have to act now, and we have to act together.

Want to know more? Check out our reference sites below.

 

The impact of COVID-19 on employment and jobs

The future of work after COVID-19

 

What You Should Know About COVID-19 and the ADA, theRehabilitation Act, and Other EEO Laws

 

Can Employers Force Pregnant Women to Get Vaccinated?