Over the past weekend, President Joe Biden said gas stations should lower the prices of gasoline $2 a gallon because the cost of a barrel of gas has dropped $15–showing that our president doesn’t understand how the economy works.
In Biden’s world, ignorance is bliss. Free enterprise is lost on him and many progressives.
“The White House is either straight ahead of misdirection or a deep misunderstanding of basic market dynamic,” Jeff Bezos, a man who understands the private sector far better than Biden, posted on Twitter.
Biden clearly needs to brush up on the facts. Almost every gas station–90 percent of them–is owned by individuals or small businesses, not by the big oil companies. As prices at the pump rise, the owners actually lose money. For example, a gas station buys gas for $1.00 and sells it for $1.20. Thanks to inflation, the station has to purchase gas for $1.30. All that being the case, did the station make a profit? Of course not. The cash flow is actually negative.
Raising gas prices work against profit and cash flow. Gas stations don’t make money and improve their cash flow until prices level off or decrease. It’s Economics 101.
With this kind of pronouncement, Biden is acting more like a dictator than a man of the people. Shame on him for not understanding basic economics–but what do we expect from someone who spent far too much time in government and not enough working in the private sector?