Comment by thegrim33 | Hacker News Reader

Comment by thegrim33 | Hacker News Reader

The claim: "there’s now evidence that price-fixingp in the oil industry alone may single-handedly be responsible for a little over a quarter of the total inflationary increase in 2021."

Ignoring the typo, which makes me completely confident in their ability to accurately report on these events, the claim is: that price fixing / collusion happened.

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Their evidence: "Yesterday, the Federal Trade Commission released evidence confirming that collusion played a serious role in hiking oil prices at that time."

They claim that the FTC has evidence of collusion, and they link to a release from the FTC.

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The FTC evidence: "The Federal Trade Commission took action to resolve antitrust concerns [..] the proposed consent order seeks to prevent Pioneer’s Sheffield from engaging in collusive activity that would potentially raise crude oil prices"

So .. they took action to resolve "concerns", to be preventative so that "collusive activity" that could "potentially" raise prices doesn't happen, in the future.

"The FTC alleges in a complaint that Sheffield has, through public statements and private communications, attempted to collude" .. "Sheffield sought to align oil production"

So .. he "attempted" to collude, he "sought" to collude, or he did collude?

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So, to summarize, the evidence uses wording like "concerns, prevention, in the future, attempt", but nowhere states that anything actually DID happen, whereas the author of this article interprets that as evidence that it absolutely did happen?

I was also just reading the FTC complaint [1] because this article reads as painfully biased.

And perhaps somebody else can fill in the blanks here, but so far as I can tell, the FTC is not alleging any sort of wrongdoing, but instead filing a complaint against a proposed merger between Exxon and another company, which could enable larger scale constraints on competition. Their evidence are the messages and comments from the head of the to-be-merged company, who made efforts to follow along with OPEC price standards (or even take the lead) as a means of maximizing profit.

Where 'strategic pricing' ends and price fixing begins is not at all clear to me, especially in a field like this where global prices are actively controlled by a price fixing cartel. But it seems to me that the main article is engaging in some extreme speculation, hyperbole, and sensationalism - while presenting it all as matter of fact.

[1] - https://www.ftc.gov/system/files/ftc_gov/pdf/2410004exxonpio...

in the actual FTC release: "Through public statements, text messages, in-person meetings, WhatsApp conversations and other communications while at Pioneer, Sheffield sought to align oil production across the Permian Basin in West Texas and New Mexico with OPEC+."

"Sheffield, for example, exchanged hundreds of text messages with OPEC representatives and officials discussing crude oil market dynamics, pricing and output. In discussing his efforts to coordinate with Texas producers under a production cut mandated by the Railroad Commission of Texas, Sheffield said, “If Texas leads the way, maybe we can get OPEC to cut production. Maybe Saudi and Russia will follow. That was our plan,” he said, adding: “I was using the tactics of OPEC+ to get a bigger OPEC+ done.”"

"NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions."

This is also legalize, so he hasn't been PROVEN to yet; but it's obvious they have a lot of things to go through here.

OK, but even assuming all the legal accusations are correct, "a little over a quarter of total inflation in 2021" is still massively unsupported.

TBH - this sounds like a very weak counter-point. The pertinent information is that oil production declined in the US during the 2021 inflationary period. A point in time where under classic money theory - either investments should have been happening too quickly or too many dollars were chasing too few goods.

Something happened in the oil industry which is unexplained by economics (at least to my knowledge), and trivially explained by collusion/price-fixing.

> Something happened in the oil industry which is unexplained by economics

1. Tons of producers went bust during the shale boom and covid price fallout.

2. Remaining producers see that the future will require less oil and remember the rest of the industry failing when they increased production.

3. They dont increase production.

This is exactly what economics projects. Less competition = worse prices. It doesnt take collusion for everyone to come to the same cocnlussion.

if the producers went bust, wouldn't their equipment/assets be bought for cheap? Particularly if the price of oil and profitability of those assets is rising?

This is what happens when people think that blogs are "the real news".

Blog author: https://www.economicliberties.us/matt-stoller/

> Matt Stoller is the Director of Research at the American Economic Liberties Project. He is the author of the Simon and Schuster book Goliath: The Hundred Year War Between Monopoly Power and Democracy, which Business Insider called “one of the year’s best books on how to rethink capitalism and improve the economy.” David Cicilline, Chairman of the House Antitrust Subcommittee, has called Stoller’s work “an inspiration.” Stoller is a former policy advisor to the Senate Budget Committee.

> He also worked for a member of the Financial Services Committee in the U.S. House of Representatives during the financial crisis. While a staffer, he wrote a provision of law mandating a third party audit of the Federal Reserve’s emergency lending activities. He also helped cut part of a $20 billion subsidy to large financial institutions. His 2012 law review article on the foreclosure crisis, The Housing Crash and the End of American Citizenship, predicted the rise of autocratic political forces, and his 2016 Atlantic article, How the Democrats Killed their Populist Soul, helped inspire the new anti-monopoly movement. His writing has appeared in the Washington Post, the New York Times, Fast Company, Foreign Policy, the Guardian, Vice, The American Conservative, and the Baffler. Stoller writes the monopoly-focused newsletter Big with tens of thousands of subscribers, which you can subscribe to here.

I don't see how any of that lends him credibility. If anything it just paints him as more of an ideologue. A career dependent on a preset agenda. No thanks.

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