Prices Were Better Under X-President Trump / Biden Administration Causing High Prices

To the political complainers of high price:

There are complaints about high prices. I don’t think people stop to recall why. It is easier to blame your political foe rather than look at facts and to understand cause-and-effect.

Perhaps this might give you some thought. Why is the employment rate so high? Think back to COVID-19 (COVID).  Worldwide on 1/30/2020 171 deaths were declared. By 12/31/2020 one-million eight-hundred thousand deaths were declared, and over 3.4 million worldwide by now. For the United States alone we had over 1.1 million confirmed deaths, compared to those who boasted (and I will say were dumb shits) that this was the typical flew of 12,000 deaths.

Now play into this those Baby Boomers born between 1946 and 1964. Approximately 3.2 million of them chose to retire in 2020. This was more than prior years. Why? They did not want to take a chance dying from COVID for the most part.

Add to this, restrictions to which businesses could remain open during COVID. Shortages of everything took place, except for oil and gas where we had abundance then due to restricted travels. Add to this the beef shortages due to lack of transportation mostly. Flooding in Texas 2024 hundreds of cattle were washed away. Other floods in recent years either destroyed cattle, or destroyed the land they fed off. Example: In 2023 in Hareford, TX, where perhaps 10,000 head of cattle were lost.

Supply and demand: Low supply and high demand the price goes up. High supply and low demand price goes down. The equilibrium point being where our needs and manufacture or service supply are balanced, meaning no surplus or shortages. So, in the case of beef, there is low supply and high demand, therefor selling prices at the market is high. Why, because people are paying that price. If you did not pay the price and stopped the purchase, the supply would increase and the seller would have to lower price to sell the beef in order to keep the product moving. What other environmental condition food can you think of that fits this scenario? Fruit maybe? How about in early 2022 when the bird flu hit our farms? The price of eggs more than doubled. Why, for the same supply and demand.

Price increases have nothing to do with who is running the country at the time it happened. This is Mother Nature, consumer supply and demand, God if you so believe in a God. This is totally out of any person’s control, let alone government control.

Let’s get back to now high supply and low demand effects price. During COVID there was very little travel taking place. That created a stockpile of oil, or high supply. With no demand the only option to keep product moving (because shutting down a refinery is not the best / safest thing to do) is to drop / lower the oil price. People who tout that an administrations cost of gas was the lowest, trying (and I laugh at that) to make you believe it was all the administrations doing it are totally disconnected to what cause and effect is, but rather connected to incoherent rhetoric they wish to believe. Now add to this that in early 2020 Saudi Arabia initiated a price war on oil with Russia. In fact the price even went negative. This price war became a major cause of the 2020 stock market crash. Yet there are still those who foolishly want to give credit to an administration (X-President Trump) for the low price of gas at the pump. Sorry, but I can sell you  a bridge in Florida if you want one.

Now look at the opposite effect of major pipe line breakages, hurricanes, unscheduled yet necessary shutdowns of refineries for months due to problems (because they had to be safely restarted). People are very quick to blame the high price of gas at the pump on an administration. They lack the capacity to understand cause and effect. They lack the capacity to think beyond their nose. They lack the ability to rationalize. They lack . . . you get it . . . a brain. This is simple supply and demand.

Now, let’s get back to employment rate. Employment rate is high, why? Not because of an administration (President Biden). Because of COVID deaths and a large population of Baby Boomers retiring, there became a big void in human resource. Companies who already raised their prices during and shortly after COVID because of supply and demand found it hard to find anybody who wanted to work. Perhaps a little true, or perhaps more true that there was just fewer people available in the work force. You cannot blame or give credit to any administration for that. It is just economics (supply and demand) in motion, caused by COVID.

Now add to this price hike that took place during and shortly after COVID because consumers were still willing to pay the high price caused by shortages, that the work force realized they are now a commodity that can ask for a higher pay. The company down the street is short people and willing to pay $1/hr. more. So, employees jump ship for better pay that creates a bigger void at the company they left. So, the company they left offers even more to get someone in as a replacement. A domino effect, and yes, it happened just like that. Our wages have gone up, hurray for us!!!! Boo, the cost of goods has also gone up and we still cannot afford to buy. Hmm, I wonder why? Does it have anything to do with companies keeping the price gouging after COVID, and tacking on the higher cost now to pay an employee because you were short employees (wow, that supply and demand thing again). The company saying “our costs have gone up 5% this year so we need to pass this back to the consumers”, even though they gouged us during COVID and left that price there.

Be real. If you raised your selling price and product was still selling at the quantity pre-COVID, would you lower your price? The answer is No, because this is business. The actual response in today’s supply is also No. There is not a reason to lower price if people are still buying at the higher price, even when you could supply more to lower the price. This is he equilibrium point of supply and demand. So, the business person says to themselves, “Let’s keep the price gouging until supply and demand indicates we need to lower our price.”

Companies have not (at least in my realm of companies I work with) and do not intend to lower their price after their COVID increase in price. I understand they need to cover the higher pay they are giving people to work for them, and that they are more than happy to pass along to the consumer. They always will pass that on as long as it sells. So, one would still expect an increase in price, but not that COVID price gouging increase which is no longer valid.

How many companies have reported record profits post-COVID? A lot, so why do they have record profits? When you here about U.S. steel mills making record profits this 2024, when they never could before, you have to say hmm. Yes, tariffs applied by administrations do help change where the supply comes from. The steel manufactures across the world still use the same raw materials. Those raw materials have greatly increased in price and have held to that increase because of the current war with Russia (COVID increases still included). Don’t for a minute think that the U.S. can ever be self-efficient. We cannot. We depend on raw materials around the world because we do not have them in the U.S. The price of steel in the U.S. has increased, a lot. Tariffs allow it to increase, the higher cost of materials adds to the increase, increase in pay caused by lack of resources (not because it was the kindness of the company) also adds. We wanted this, yet we bitch that our costs are high.

The automobile market is falling short this year, specifically in the EV market. During and post COVID you were paying above sticker price at the dealer because of low supply. They even claimed that end of last year though supply had caught up. Today, you see incentives lowering the price of automobiles. With the EV market, the government gave incentives that enticed U.S. manufactures to produce those vehicles. Tesla was forced to cut their prices because of supply and demand of their vehicle, i.e. the opportunity cost. Consumers found monetary advantage to not buy Tesla. So, it makes perfect sense who Musk wants to support as our next president. That administration would most likely not support the environment as they had not before, removing incentives to U.S. automakers that allow competition, allowing Musk to increase prices again and smile on the way to the bank. Well wait, if he was able to lower price to compete, make profit, why would he raise prices again? There’s that supply and demand thing again. The uncertainty who will be president is why U.S. automakers are choosing to moderate how many EV’s they make. They may have to flex production back to gas vehicles if they cannot make their shareholder’s profit on EV’s. But wait, is not this similar to the function of tariffs, except we are doing it internally with government policy? So, if an administration does not believe in Global Warming they can change the entire country’s policy and direction? Yep, another reason why suppliers are still in control of what we buy. We are supposed to be in control at what price, but marketing and many other factors seem to decide price for us. Also, adding trillions to the national debt is not a solution, but this is an entirely new can of worms discussion.

Setting policy to open up oil reserves to lower fuel price is a bit absurd, unless the oil industry is finding it hard to supply oil. More oil does not mean lower gas prices. Producing more gas from oil does. Yes, the two go hand in hand, but what came first. If you are trying to produce more gas from oil and don’t have the oil, yes open reserves if you must. If your refinery is near capacity more oil does nothing to the price of gas. The real kicker, if we are still buying the same amount of gas at the high prices, why in the world would any of them lower the price to cut profit? Where is the incentive to build more refineries so that price can be lowered? Yes, that is absurd, who would build more factory to lower price if the consumer is still consuming at lower production and the higher price? After all, I’m not running short on gas (excluding disasters that will cause that shortage – damn supply and demand again). What are the industries reported profits again? What are their incentives to reduce price? Oh, no foreign competition to provide oil. I’ll leave the price where it is thank you. This reminds me of the Steel industry somehow.

You complaining about high prices, posting in social media how great it was under a certain administration suggesting the administration has total control, is unfounded. Policies can be made to control price. But the “what’s in it for me” attitude will never lower prices down to me.