Gas pains
June 9, 08, 11:13 am
Filed under: economy, fuel prices, gas prices, oil | Tags: , , , ,

Take some time to comfort your ailing pocketbook today. Fuel prices hit the $4 mark over the weekend. From WSJ:

The average price of gasoline in the U.S. hit $4 a gallon for the first time Sunday, the latest milestone in a run-up in fuel prices that is sapping consumer confidence and threatening to nudge the nation into recession.

The record nationwide average for regular-gasoline prices, announced by auto club AAA, follows Friday’s near-$11 surge in oil prices to a record $138.54 a barrel. Both are part of what, by some measures, is the worst energy-price shock Americans have faced for a generation, in terms of its toll on their pocketbooks.

No doubt gas is putting the hurt on us. But – eternal optimist that I am – I always seek the silver lining in these stories. Fortunately, since this article comes from the WSJ as opposed to the AP, we are given not one but three:

Some economists hold out hope the current oil-price surge won’t be as devastating as some in the past. For one thing, consumers and businesses are far more fuel-efficient today than they were during the oil shock of the mid-1970s, requiring half as much energy to produce a unit of economic output.

Interest rates also are far lower than they were then, and the Federal Reserve is expected to hold its interest-rate target steady at 2% for much of this year. The dollar’s weakness, meanwhile, is raising overseas demand for American products, and growth in exports is a key reason why the U.S. economy has continued to expand — albeit slowly — over the past six months.

Most important, consumers have shown surprising resilience over the past five years, despite continued surges in their fuel costs. “While it certainly makes it tougher for the economy for the next few quarters, I still believe consumers can adapt,” said Peter Kretzmer, a Bank of America economist.

Absolutely, we can adapt. We’re actually kind of a tough country when you get right down to it. We have weathered a lot and we will survive this. In the meantime if you’re that cranked up about gas, find a co-worker – preferably one that you don’t already want to strangle – and carpool. It’s a sure way to cut your commute expenses in half. Or get a bike to take up some of the slack. The exercise and fresh air could open up a whole new world for you (but if you’re over 45, stay away from the spandex… please).

And if you still insist on getting worked up about something this election year, let me suggest the federal income tax. That is where you’re really getting screwed.


2 Comments so far
Leave a comment

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Comment by Josh Maxwell


One of the reasons though that oil is high, is because of the weak dollar and low interest rates as capital seeks higher returns.

Comment by goesdownbitter

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