Joe Biden's gas-station demagoguery

Allow me to solve that mystery: Gas stations don’t sell crude oil — they sell gasoline.

And, contrary to what the Biden brain trust seems to think, wholesale gasoline prices do not move in lockstep with crude oil prices. And retail gasoline prices do not move in lockstep with wholesale gasoline prices. I don’t get the feeling that President Biden is up to the second on RBOB spot prices. (That’s “Reformulated Feedstock for Oxygenate Blending,” the main ingredient in commercial gasoline.) There’s a whole complex market out there, and the guys who have a “slight Indian accent” are minor players in it.

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As anybody who has ever sold anything for a living can tell you, you don’t get to set your own margin. The market does that for you. Politicians talk as if — and, in many cases, honestly believe — the way a business works is that a retailer picks some numbers out of the air — 7.5 percent or 10 percent or 22 percent — and simply marks up whatever he pays for his product wholesale by that amount, and that this is how retail prices are set. That is what academic economists call absolute horsepucky.

(Try selling newspaper subscriptions in a city in which a quarter — or maybe half — the population can’t really read. It isn’t exactly a name-your-own-price proposition.)

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