Last Call For It's A Gas, Gas, Gas Con't

Gasoline prices have fallen sharply since Election Day, but the news behind that price drop at the pump isn't exactly great.

 

The cost of gasoline is falling so fast that it is beginning to put real money back in the pockets of drivers, defying earlier projections and offering an unexpected gift for the holidays.

Filling up is now as cheap as it was in February, just before Russia’s invasion of Ukraine touched off a global energy crisis. AAA reported the average nationwide price of a gallon of regular Wednesday was $3.50, and gas price tracking company GasBuddy projected it could drop below $3 by Christmas. And all of that relief probably helped drive robust shopping over Thanksgiving weekend.

“People are realizing that they might be back to spending $50 to fill their tank instead of $80,” said Emma Rasiel, a professor of economics at Duke University. “It is the main signal consumers notice on inflation. It is the one thing they are likely to track, how much it has gone up or down, because every week they need to fill up their car.”

But Rasiel cautioned that less-expensive gas can also give consumers the wrong idea. Prices of other goods and services are much less volatile, and there is no indication that this moment of more-affordable fuel is pushing the cost of other things down.

Even as the plunge in prices at the pump helps fuel a national holiday shopping spree, it is a reflection of the financial strain consumers and businesses are confronting worldwide. Prices are going down because demand for oil and gas is falling as countries brace for recession, coronavirus outbreaks in China threaten major financial disruption and drivers cut back on gas-guzzling as they try to save money to cover skyrocketing mortgage payments and stock market losses.

Earlier worries that sanctions on Russian oil would create a shortage in supply and send prices soaring toward the end of the year have, for now at least, given way to ailing economies and jittery financial markets.

“We’re heading into serious recession in Europe and further economic slowdown in the U.S. as people struggle with high interest rates and worry about their personal wealth and savings,” said Ben Cahill, an energy security analyst at the Center for Strategic and International Studies. “Add it all up and it creates a bleak picture for oil demand. Prices are reflecting that.”

Also helping keep prices low at the moment are some key U.S. oil refineries that returned to churning out gasoline after months of being out of commission for maintenance and repairs.

But just as big a factor is the turmoil in China. As its leaders signal that new coronavirus lockdowns are imminent, touching off protests throughout the country, the expected economic fallout has turned oil traders bearish.

China alone accounted for 16 percent of global oil demand last year, according to the research firm Capital Economics, which projects its purchase of oil will drop by 1 million barrels per day in December as coronavirus infections spread. The effect of such a drop on global oil markets is considerable, reducing the price of Brent crude by as much as $10 a barrel, or more than 10 percent.

 

So the Russian oil doomsday scenario hasn't come to pass quite yet, but the global economy is headed for some bad times in 2023. How hard the landing is going to be is still up in the air, but at least gas prices are headed back under $3 for a while. 

Diesel out here in the Midwest is still $4.50-$5 a gallon though, so that's still costing consumers more at checkout. Still, gas prices here in KY are below $3 in several counties.

Beshear also applauds gas prices dropping across the state. ^AH pic.twitter.com/OkQuwvG56l

— Bluegrass Politics (@BGPolitics) December 1, 2022

We'll see what the Fed decides to do with interest rates later this month.

Ron's Gone Wrong, Con't

Now that Florida GOP Gov. Ron DeSantis has easily prevailed in the 2022 midterms, and Disney CEO Bob Chapek has been shitcanned in favor of a return to former CEO Bob Iger, the stage is set for both sides to come to the table and reverse Florida's very expensive decision to eliminate Disney's special tax district status.

Florida lawmakers are working on plans to reverse a move that would strip Disney of its right to operate a private government around its theme parks, potentially resolving the fallout from the “Don’t Say Gay” controversy that dragged the entertainment giant into the culture wars.

In April, the Florida legislature voted to dissolve Disney’s 55-year-old special tax district following a public feud between Ron DeSantis, the state’s governor, and then-chief executive Bob Chapek over a new state law restricting discussion of LGBTQ issues in classrooms.

The set-up allows Disney to tax itself to cover the costs of providing water, power, roads and fire services in the area, known as the Reedy Creek Improvement District. The special district is seen as essential for the theme park operator to maintain high standards for visitors.

However, state lawmakers are working on a compromise that would allow Disney to keep the arrangement largely in place with a few modifications. Some believe the return of Bob Iger as CEO last month will help pave they way for a resolution, according to people briefed on the plan.

Randy Fine, the Republican lawmaker who drafted the law to end Disney’s control over the 25,000-acre Reedy Creek property, said that Chapek’s removal from executive office last week improved the chances that “something will get sorted out” over the district. “It’s easier to shift policy when you don’t have to defend the old policy,” Fine said. “Chapek screwed up, but Bob Iger doesn’t have to own that screw-up.”

Since returning to Disney, Iger has steered clear of criticising Florida for a bill that he had warned would “put vulnerable, young LGBTQ people in jeopardy” when it was introduced in February. Iger’s full-throated opposition to the legislation, dubbed “Don’t Say Gay” by critics, put pressure on Disney to reverse course this spring and come out against the bill after initially refusing to take a stand. The vacillation helped fuel a sense Chapek was struggling to make big calls as CEO.

At a town hall meeting with employees on Monday, Iger said he was “sorry to see us get dragged into [the] battle” over Reedy Creek and needed time to “get up to speed” on the issue.

“What I can say [is] the state of Florida has been important to us for a long time and we have been very important to the state of Florida,” Iger said. “That is something I’m extremely mindful of and will articulate if I get the chance.”

Iger struck the right tone for reaching a compromise, said an influential figure in Florida state politics. “That was a good olive branch message to Disney employees and the state of Florida,” he said. “It was a diplomatic kind of message.”

Meanwhile, tax officials and lawmakers have warned dissolving Disney’s private government threatens to shift an enormous financial burden to taxpayers and potentially transfer a $1bn debt load to the state.

 

Both Disney and DeSantis know quite a bit about putting on a show for the folks in Florida, and both sides will get what they want. Keep this is mind as Ron goes after Apple over Twitter next.

Florida Gov. Ron DeSantis (R) on Tuesday joined a growing chorus of Republicans criticizing Apple after Twitter owner Elon Musk claimed the tech giant threatened to remove Twitter from its App Store, strengthening the GOP’s ties to Musk and amplifying their shared criticism of major tech companies.

Removing Twitter from the App Store would be a “huge, huge mistake and a really raw exercise of monopolistic power,” DeSantis said Tuesday while speaking at an unrelated event in Duval County, adding that he believes the move would call for a congressional response.

Apple has not publicly responded to Musk, who tweeted about the alleged threat Monday afternoon, or confirmed that it threatened to remove Twitter’s app.

DeSantis speculated Apple’s alleged threat was based on Musk’s reinstatement of Twitter accounts that were “unfairly and illegally suspended for putting out accurate information about Covid,” he said, though Musk has said it’s unclear why Apple issued the warning.

 

At this level folks, it's all a show.

 

Long Train Runnin', Con't

As expected, the Senate easily passed the bill to force unions and the railroad corporations to accept the tentative deal from September, but Senate Republicans -- and Joe Manchin -- killed the sick leave proposal.

 

The Senate on Thursday voted to force a labor agreement to try and avert a looming strike of the nation's railway workers.

A bipartisan majority of senators approved a House bill that will codify a tentative agreement between the rail companies and rail unions, which was brokered in September and subsequently rejected by some of the workers.

The Senate separately voted down two additional provisions to address the labor dispute: whether to institute a 60-day extension of the cooling-off period between both sides and whether to grant workers seven days of paid sick leave.

The first vote, on the cooling off period, failed 69-26.

The second vote, to add seven paid sick days for workers, needed 60 votes to pass and fell short with a 52-43 total. Six Republicans -- Lindsey Graham, Josh Hawley, Marco Rubio, Ted Cruz, Michael Braun and John Kennedy -- voted to add sick leave while one Democrat, Joe Manchin, voted no.

The third vote, to uphold an agreement negotiated by the White House between freight employees and their bosses in September, passed 80-15. Five members of the Democratic caucus -- Bernie Sanders, an independent, as well as John Hickenlooper, Kirsten Gillibrand, Elizabeth Warren and Ed Merkley -- voted no.

President Joe Biden has vowed to quickly sign the labor agreement into law.

The Senate’s move to try and end the labor fight comes as the White House has emphasized that they believe the chamber needs to send legislation "by this weekend" to avert a work stoppage or the nation could see potentially “devastating effects," given how much of the economy relies on rail to move goods.

The workers' unions reacted with open dismay, they said, at the government's intervention and Biden has described himself as a "proud pro-labor" president who made a difficult decision for the good of the larger economy.

At Biden's urging, the House on Wednesday passed a law enforcing the September tentative agreement plus separate legislation to add sick days for workers, which had become a major sticking point in the unsuccessful negotiations.

Representatives voted 290-137 to adopt the deal between the rail companies and employees that was negotiated by the White House and 221-207 for the sick leave -- a key provision in addressing progressive Democrats' concerns to further protect workers.

Sanders had been urging his colleagues to consider boosting paid leave provisions for the rail workers and spoke on the floor between votes.

“Workers who do difficult and dangerous work have zero paid sick days. Zero. You get sick, you’ve got a mark against you. Couple of marks, you get fired. This cannot and must not happen in America in 2022,” he said.

 

The rail unions are vowing not to forget this in the future.  Kinda don't blame them. But I hope they remember that Senate Republicans made sure they ended up with zero sick days, too. 

Still, it was Democrats who passed this billand Biden who will sign it, when Republicans were perfectly happy to have an economy-destroying rail strike two weeks before Christmas.

 

The real villains remain the railroad companies, but America can't exist without rail freight. We've been having this fight for 150 years, folks.

It's not going to get better anytime soon.