Early in his first year in office, President Joe Biden and his officials claimed that inflation, which began to rise in earnest after the passage of his $2 trillion COVID relief measure last spring, was “temporary.” It was a refrain they repeated over and over for months, until even Treasury Secretary Janet Yellen and Federal Reserve Board Chair Jerome Powell made it obvious that it wasn’t ephemeral at all. It was at this point last December that Powell finally admitted that “it’s probably a good time to (temporarily) retract that word.” Yellin herself admitted that she misjudged the situation during recent testimony in Congress.
When this duck started losing its cache in October, Biden and his team resorted to busting the oil industry over soaring gas prices, a White House official anonymously revealed Reuters that “…we are using all means at our disposal to address anticompetitive practices in the U.S. and global energy markets to ensure reliable and stable energy markets.” No one in the administration bothered to explain exactly which “anti-competitive practices” the official was referring to, which frankly wasn’t surprising.
Over the next few months, Mr. Biden and senior officials including Secretary of Energy Jennifer Granholm and various economic advisers oscillated between blaming “Big Oil” for inflation and the fallout from the COVID-19 pandemic.
This finger-pointing lasted until March, when the government ran into the best inflation boogeyman of all, Russian President Vladimir Putin. White House spokeswoman Jen Psaki brought up the talking point “Putin’s price hike” during a White House press briefing shortly after Putin’s invasion of Ukraine, and a new blame narrative was born. Suddenly, Putin’s decision to invade Ukraine on February 24, 2022 became the cause of an inflationary problem that Biden himself had reportedly been fighting since at least the summer of 2021.
But simplistic explanations for complex, chronic problems tend to have short lives, and the “Putin price hike” narrative was no exception. Not that it’s been abandoned entirely — the president himself reintroduced it on Friday during a press event in the Port of Los Angeles, saying, “We’ve never seen anything like Putin’s food and gas tax.”
But few in the press actually buy it anymore, and even fewer ordinary Americans. The President’s Advisory Team can read the polls and almost anyone can understand them. So Biden didn’t stop blaming Putin, he also reached out to COVID and then of course the “big companies” that he claims are “not paying their fair share” of taxes, picking one out well-known name specifically: ExxonMobil
“We’re going to make sure everyone knows about Exxon’s earnings,” Biden said. “Why don’t you tell them what Exxon’s earnings were this quarter? Exxon made more money than God this year, and by the way, nothing’s changed. One thing I want to say about the oil companies is that they have 9,000 permits to drill. You don’t drill. Why don’t they drill? Because they make more money without producing more oil. Price is going up number one and number two the reason they are not drilling is because they are buying back their own stock which should be taxed quite openly, buying back their own stock and not making new investments. So ugh, I always thought Republicans were pro-investment. Exxon start investing and pay your taxes thanks.”
Naturally curious about what the people at ExxonMobil might think about being chosen by a sitting President of the United States for this sort of ad hominem attack on the integrity of the company, I reached out to comment. I received the following response from ExxonMobil’s Senior Advisor, Corporate Media Relations, Todd Spitler:
We have been in regular contact with the government to update them on our planned investments to increase production and refinery capacity in the United States.
We increased production in the Permian Basin by 70% or 190,000 barrels per day between 2019 and 2021. We expect to increase production from the Permian by another 25% this year. We’re spending 50% more on capital expenditures in the Permian in 2022 compared to 2021 and increasing refining capacity to process US light crude oil by about 250,000 barrels per day — the equivalent of building a new mid-size refinery.
We reported losses of more than $20 billion in 2020 and borrowed more than $30 billion in 2019 and 2020 to support our investments in manufacturing around the world. In 2021, total taxes on the company’s income statement were $40.6 billion, an increase of $17.8 billion from 2020.
The reality is that Exxon and other oil companies pay many billions in local, state, and federal taxes every year. They pay the taxes required by law, and if the government feels that this is not enough, only the government can change those laws.
Since the first Arab oil embargo half a century ago, American policymakers have blamed rising inflation on no handier bogeyman than “Big Oil” in general and ExxonMobil in particular. Unfortunately, it’s a tiresome and cheap political game that will probably never end.