April 21, 2008

Gas Price Woes

It's fun to sit around talking about boards of inquiry or who went to the local massage parlor, even lamenting the fate of Tom Christy. But you know what? When the rubber hits the road, none of it means a damn hill of beans. And despite the fact that those of us who read and participate in blogs and message boards love to do so, the reality is that what is said on sites such as this one is of small consequence.

What does matter is the economy and soaring energy prices. Sure, we watch the news most nights, and yes, they touch on economic news. But now it's starting to hit home for a lot people.

Gas prices aren't only affecting your wallet at the pumps. Everything that is transported will be impacted.

A simple glimpse of a couple of newspapers is more horrifying than a Stephen King novel. Manufacturers were walloped by zooming prices for energy and other raw materials; Lofty energy prices are squeezing businesses' profits and pinching consumers, leaving them with less money to spend on other things; The housing market continued to be stuck in a rut; The weak dollar. Soaring oil prices drove wholesale prices up 1.1% in March from February, the second-largest increase in 33 years.

Even Fed Chairman Ben Bernanke recently acknowledged for the first time that a recession was possible. That was a rare utterance of the "r" word for a Fed chief.

There are some beautiful vehicles on the road right now. The Escalade, the Avalanche, the Tundra, even the new Charger and soon-to-be released Camaro is going to turn alot of heads. Unfortunately, I don't know how anyone who drives significant miles can continue to own a vehicle that is getting 12 miles to the gallon. Actually, I do know how they will be able to afford it: They'll cut back in other places, and that will send a ripple effect through the local economy, especially local restaurants. When times are tough and people start cutting back, entertainment is the first luxury to go.

Having recently celebrated a birthday, my in-laws gave me a check for $50. Sadly, my first thought was, "Woohoo, I've got gas money for part of the week!". Hell, maybe I'll forget about throwing it in the tank and go for a fish fry instead - nothing like living on the edge.

6 comments:

frank degeorge said...

Can we please start a George W. Bush countdown clock? I'd like to formally apologize for having voted for this jackass twice.

His inability to actually produce policies that address what is going on in this country is remarkable.

Larry S said...

I'm with you, Frank. If the Dems had put virtually anyone up besides John Kerry, I think I'd have voted for him. As a Rep, I even think Bush is a disaster.

Pete M said...

In about three weeks, anyone thinking about buying an SUV should start looking. When gas hits $4.00 a gallon, dealerships won't be able to give them away. Of course, the downside is that if you are planning on trading in one, you shouldn't expect much for your trade. Simple supply and demand-demand goes down, price goes down. Time to start looking at that Honda.

Anonymous said...

From AP...The odds the country will fall into its first recession since 2001 are rising sharply. Thirty percent of economists now believe the economy will shrink in the first half of this year, up from 10 percent who thought this in January, according to a survey being released Monday by the National Association for Business Economics.

DS said...

The average is still cheaper than it was in the early 80's:

http://inflationdata.com/inflation/images/charts/Oil/Gasoline_inflation_chart.htm

And in all reality, if it goes past that, it's not much more that it has been before. We were just spoiled for quite some time.

sick & tired said...

anon,

Americans, as a way of life, are spoiled in this world. Our expectations, even for the least fortunate among us, generally exceed expectations in most of the world.

There are a few exceptions, much of Western Europe for instance has a vibrant and materialistic middle class, but even the Euro's have adapted to long-term high petro prices by driving smaller, more fuel and space efficient cars, utilizing mass transit systems and resisting suburban sprawl.

So when you suggest that, relatively speaking, gas prices are no higher than they were several decades ago, American expectations, spoiled as they are, cause your argument to fall on muffled ears.

The "relativity" argument also loses impact when the overall economy is factored in, relatively speaking. As I read the economic trend reports, over the last 30 years, the American middle class has been shrinking while the upper crust has gotten thicker. Meanwhile, middle class mobility is more likely to mean downward rather than upward mobility. As they say, the rich get richer, etc.

Given all that, its somewhat surprising to this observer that lower middle-class and working class Americans have gathered around the party of Herbert Hoover based on the charismatic appeal of Ronald Reagan and the right-wing social movement. This is the phenomenon that Barack Hussein Obama (BHO) was referencing when he noted certain "bitter" Keystoners.

My theory is that while these folks should be solid Democrats, they cling to their faith, their guns and "family values," not because they are bitter over the economy, but because these are the only things they have left to cling to. The things that government or corporate greed cannot take from them. And when they find a champion protector of these core American values, they flock behind them.

Reagan recognized this and exploited them politically, while in reality giving little tangible in return. Its not until the neo-conservative administration of GWB, that some of these folks are starting to realize that they've been hoodwinked.

High gas prices and a redistribution of wealth from the masses to the elite are the ultimate legacy of Ronald Reagan's Revolution. Trickle down is really trickle up.

Post Script: For the same reasons that the macro trickle down theory doesn't work in the long run, local trickle down of government interference and subsidy for big development in the guise of IDA PILOTs and assistance, grants, loans and other forms of economic incentives to business interests also has failed to "raise all boats" here in Niagara County. For if this system worked, we would surely all be prosperous indeed.