Daily Archives: May 3, 2021

An economic whisper

Jack wrote this in August, 2005. I wish I knew what the price of gas was that he was writing about.

Sometimes I’m almost tempted to read the newspapers or even watch television.  The insanity usually passes quickly, but it happens.

That’s sort of where I am this morning.  Sniffing the air, twitching my ears and nostrils, finding myself on the brink of investigating something that is none of my business, something that is outside my ability to have any influence on it, something I could find myself getting angry about, nevertheless.

I’d noticed gasoline prices hanging around a fairly high level for some time.  My mind toyed around with it in the background, couldn’t help it, I suppose, feeling around for an explanation.  Tossed it off as something outside my range of interest, something to be ignored and lived with.

But yesterday when I went down to Bernalillo to buy a couple of PB tickets for the $3 million dollar jackpot they’re running at the moment, I couldn’t help noticing the pump prices.  It was an eye-catcher.

I assume this is true everywhere in the US.  I saw it at all the other stations down there after I once began looking.

The highest gasoline prices I’ve ever seen in the United States.

Six decades of price wars, wars, oil embargoes by the folks in turban country….. I’ve never seen anything approaching this before.

Which, naturally leads me to wonder what’s going on.  And wonder what is going to happen to fuel oil prices this winter.  Electricity.  What’s to happen in the stores when the price of transport gets translated into the price of bread.

Someone mentioned this on a thread yesterday.  DVdiva, maybe.  Spoke of it in the context of the astronomical price of housing.

So.  We have become a country with no industry to speak of, a country with no industry.  We’ve become a consumer economy, but our dollars have no meaning outside the context of commodities we produce that are worth something to someone.  Dollars have no value unless they can buy products, and they derive their value from products produced inside the US, products that can be traded to some CHICOM gent for the rubber monster toys he produces and sends to us.  Traded to some guy in a robe and turban with a lot of gold hanging off him for a barrel of oil.

And, of course, there’s now the fact that people gas up, gnash their teeth, walk inside to take a bath in the wallet department, and then, while the drums point and the audience waits with baited breath, while the chorus girls pause, right leg lifted,  yeah, right then when he feels the pinch of something happening that’s entirely beyond his ken, he has to make a choice about whether to buy a lottery ticket.

Those lotteries are going to have to scrape around before too long, be satisfied what’s scraped off the bottom of the pot after the groceries, gasoline, insurance, and a six pack of Jim Beam.

Can’t help wondering if the chickens are finally coming home to roost, or whether this is just something related to the war we’re fighting somewhere, something that will pass and soon be forgotten.


A bit later, he wrote this:

Got hold of a newspaper to try to figure out what’s happening with these gasoline prices.

“Merrill-Lynch economists estimate that every penny-per-gallon increase at the pump drains about $1.5 billion out of the consumers’ pockets.  That means the increase in gasoline costs this year has reduced the amount consumers have to spend on other items by about $90 billion.

However, that drag on consumer spending has been offset by low long-term interest rates, which have spurred homeowners to refinance their mortgages and spend the savings.

So far, analysts note little indication has suffered and say inflation expectations are different.

Oil shocks in the 1970s and 1980s occurred at a time of sharply rising inflationary pressures, prompting aggressive interest rate increases.”

Naturally, I find that pretty comforting.  We don’t have to anticipate a lot of inflation, so there’ll be roughly the same amount of money circulating.  Likely as not the price of coffee, which I noticed had gone up almost double, will drop again because nobody’s going to have any money to buy any of it.  Same with everything else that involves transport (fuel costs).

But it’s been a hot summer.  We’ll all welcome this cold winter we’ll be able to enjoy better because the summer was so hot.

I’m glad I don’t understand economics.