This Week in the Mayonnaise Clinic: Do My Political Donations Even Matter In These Midterms?
Plus: Who is this messaging on oil refiner profits even for?
Welcome to another edition of the Mayonnaise Clinic — our weekly roundup of reader’s email questions and my answers to them.
But before I get to this week’s mail, I want to make some follow up comments about gas prices and the Biden administration, which I wrote about on Tuesday.
On Wednesday, President Biden sent a letter to major oil refining firms. The letter is built around a true observation: Refining capacity is constrained, and that’s a reason that gasoline prices have risen even faster than you might expect from the rise in the price of crude oil. The letter also asks the firms how the administration can work with them to increase capacity, so more gasoline can get to American gas stations and prices can fall.
The letter also contains a bunch of whining about how the refiners are charging too much for gasoline and making too much money. And it includes some mealy-mouthed language that suggests the administration may not be too keen to loosen regulations in order to get refining capacity up — saying that measures to reduce output will need to “respect the critical equities of energy workers and fence-line communities.”
My feelings about this letter — and related comments from Press Secretary Karine Jean-Pierre, Energy Secretary Jennifer Granholm, and other administration officials — are summed up in these tweets.
Prices move to the market-clearing level: If refinery capacity is a major constraint on gasoline consumption (it is), then refiners will raise prices and their profit margins, or there will be gasoline shortages because demand will outstrip supply. You can avoid that situation by adding refining capacity, but that requires expensive investment —something that’s hard to convince companies to do at a time when interest rates are rising sharply and the administration wants to start discouraging gasoline consumption again in the medium- and long-term. Scolding isn’t going to work. You have to make it make financial sense for these companies to increase their capacity and their output.
Industry consolidation (and the idea that excessive investor “discipline” discourages business growth and competition) has become a bit of a hobby horse for this administration. But in addition to overestimating the importance of this phenomenon, they seem to greatly overestimate the utility of complaining about it. Okay, you don’t like that these companies aren’t putting out more gasoline. What are you going to do about that, besides complain?
ExxonMobil responded to Biden’s letter with some sensible requests — like that the administration should approve more leases for oil and gas production and waive the Jones Act that raises the cost of shipping petroleum and petroleum products. I’d add that the administration should see if it can find a way to get a major sidelined oil refinery, the former HOVENSA refinery in St. Croix, back online and producing gasoline. As Peter Baker notes in The New York Times, that refinery has a history of regulatory trouble, but so did the Abbott Nutrition formula plant, and when it became politically essential, they found a way to get that operation back to making baby formula (except when it’s flooded).
So, get on that. Because answers like this are not impressive.
Okay, on to the mail.
I'm frustrated with the increasingly counterproductive messaging and campaign strategy that seems to have infected the Democratic Party. I donated money (probably too much) in 2020 to my state party and the DSCC but haven't donated anything yet for the 2022 cycle. Is there something like Effective Altruism for giving to Democratic candidates?
I took a similar question back in March, in which I provided some tips from my friend Brian Derrick, who used to raise money for Democratic candidates but has switched to advising Democratic political donors. Brian has a free newsletter for people trying to do what you describe — give money in a way that isn’t built around getting emotional satisfaction from opposing Marjorie Taylor Greene or whoever, but that actually helps Democrats win — and he also has a paid advising service aimed at the sort of people who give enough money to benefit from professional guidance but not so much money that they might have traditionally hired a personal donor adviser. (“If someone is giving less than $5,000 per campaign cycle, they can probably get all the needed info from my free newsletter,” says Brian.)
Back in March, he advised that people should “give early,” “give downballot,” and “give strategically, not emotionally,” and you can look back at that issue for exactly what those three points mean. But since the election is coming up in less than five months, it’s not really early anymore, and I followed up with Brian to ask about what Democrats should do right now, as Election Day creeps up and, frankly, things look pretty grim for the party.
Here are a few highlights from his advice: