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18 Oct, 2021 12:35

Rise in gasoline prices is another nail in the coffin of American workers’ budgets, but profits are put above people, as always

Rise in gasoline prices is another nail in the coffin of American workers’ budgets, but profits are put above people, as always

The real driver behind increasing gasoline prices in the US is capitalism, not what the right wing calls Joe Biden’s ‘socialist’ policies. No matter what, the system is built to ensure Wall Street wins and we lose.

In May of 2008, while Americans were paying about $4 per gallon of gasoline at the pump, some of the US ruling class’ ‘captains of industry’ were hauled before a House Judiciary Committee hearing on retail gasoline prices. 

One of the oligarchs being questioned was the President of Shell Oil, John Hofmeister. Representative Maxine Waters (D-CA) shot at him: “This liberal [meaning herself] would be all about socializing – would be about basically taking over and the government running all of your companies, and that, I tell you, is an extreme position.”

I have personally never encountered a liberal who has advocated this position, but nevertheless conservative pundits lost their minds at this assertion, arguing that this slip of the tongue was evidence of the Democratic Party’s Socialist agenda. These pundits had nothing to worry about; the Democrats would never do such a thing, not because it is an “extreme position” but because it is far too rational, logical, and good for the American people. 

While currently average gas prices are a long shot away from 2008, they are still the highest they have been since 2014, now standing at $3.25 per gallon. 

I am constantly assured by both Fox News and conservatives around me that this is obviously the work of nefarious Joe Biden and his Socialist goons lurking behind the scenes. Biden and his ilk are no doubt at fault, but not because he is too left or secretly a Socialist. Quite the opposite: he is a member of the ruling class and committed to market fundamentalist capitalism which continues to squeeze the working class further and further for the profits of a few. 

The owners of the oil rigs in the United States appear to be making up for lost profits in 2020 by shutting down production and thus contracting supply. At the very beginning of March 2020 there were 683 operational oil rigs in the United States, but by August this number dwindled to 172 which partly made sense because of the huge drop in demand caused by the Covid-19 pandemic shutdowns. 

However, now millions of Americans are returning to work and thus filling up their tanks once again. Yet, on October 1, only 428 of the rigs were operational. This number represents less than half of the 887 operative oil rigs in November of 2018. Why aren’t more rigs operational? The answer is simple: the oil robber barons are withholding production to drive the price up while also cutting operating costs, much to the detriment of working families. 

A nationalized oil industry (hopefully coupled with an economy of Socialist transition) would not be concerned with profits for greedy executives and thus would not seek to maximize profits by cutting supply or raising prices. Workers in the US are already in numerous precarious and dangerous positions and the increasing prices at the pump is just another nail in the coffin of a working family’s monthly budget. 

Also on rt.com US oil benchmark tops $80 per barrel for first time in 7 years

Another way the ruling class oligarchy steals our money at the pump is in the speculative oil futures market. According to Reuters, hedge fund managers have purchased the equivalent of 170 million barrels worth of oil futures contracts. Goldman in 2011 estimated that every million barrels of oil held by speculators contributed to an eight to 10 cent per barrel rise in the oil price, and this estimate may be low, as the company is a guilty party in the Wall Street speculation bonanza.  

It is also telling that crude oil futures are currently at the same price level as they were in 2014, the last time gasoline was this expensive at the pump. In 2012, then CEO of ExxonMobil Rex Tillerson said the cost of a barrel of oil should have cost “somewhere in the $60 to $70 dollar range” if it were based on supply-and-demand fundamentals. Considering that the price of oil was about $100 at the time, we can see just how much parasitic speculators can inflate the prices of basic goods. If one looks at the oil futures price charts, it is plain to see how much of the price we pay at the pump is influenced by Wall Street gambling addicts. They have gamed the system to ensure no matter what, they win and we lose. 

In the wake of all this research, congressional hearings, data, and evidence showing that the price the workers pay at the pump is inflated to further fatten the wallets of plutocrats, Democrats had a “solution.” With all branches of government solidly in the hands of the Democratic party, they sought to strengthen the Commodity Futures Trading Commission, spearheaded by Senator Bernie Sanders. This was far too little, and far too late. 

After it had been found that there was ample evidence that the rich and powerful had been siphoning an average of 41-82 dollars per family per month out of working families’ pockets, any rational government would make this practice illegal. 

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Why should financial institutions be buying futures contracts for oil they would never use? Speculative trading would be illegal and those who blatantly put profits over people should at the very least have seen their ill-gotten gains seized under any sort of popular or socialist government. 

Moreover, natural resources with strategic importance for the country and the people should not be in the hands of a few executives and shareholders who have made and continue to make trillions of dollars while price-gouging consumers and polluting the planet. 

If America had a sane government of, by, and for the people and the masses, public ownership over strategic natural resources would be life changing for millions of people. 

But the problem remains the same: putting profits before people. The problem is capitalism.

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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.