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Saturday, October 16, 2021

Finance blog: Presidents Lie

Now, whether you are republican, democrat or independent you probably have accused a president of lying once or twice. No matter which president you have had an angry tirade against I will give you justification for any such rant, provided it is in the form of accusing him of lying. However, it is not in the form that you are expecting.

Oil, the very thing few people know, is what makes plastic. Or more commonly, the commodity countries have repeatedly waged war over.

Oil always seems to come up during an election year, and more specifically what the presidential candidates will do about the price of oil. Regardless of what a presidential candidate may say, the president of the United States has almost no control of the global price of oil.

The price of oil, since 1973, has been almost completely controlled by OPEC, which stands for... it doesn’t really matter, it’s basically a group of middle eastern countries who decide how much oil they will produce.

In the past it has severely limited the supply in order to keep the price up. This is why it was so expensive in 2008. You can blame the popularity of prius’s on this raise in prices. However, now in 2015 when the price of oil is comically low, the reason behind this is that these countries which previously decided to limit the supply decided to break their near monopoly and started pumping.

Anyone who has taken an intro level economics course can tell you that when you increase the supply of a good, the price goes down. So no matter what President Barack Obama claims, or may have claimed, he had little to do with the price of oil plummeting. The only thing he can possibly do is allow more drilling which would alter the price minimally.  

So, stay on the lookout for presidential candidates this year claiming that they can either keep the price of oil low, or make it go further. If they do, I give you permission to call whomever it may be, a liar.

As always, if you enjoyed this article you can send your fan mail to bussj14@ufl.edu. I prefer to get paid in compliments anyway. If, how the price of oil or any other commodity is determined, or any economic/financial issue perplexes you don’t hesitate to contact me.

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