View From a Height
Commentary from the Mile High City
Friday, May 21, 2004

The Economy Feels Worse? 

Hindrocket, over at Powerline, finds the idea that large numbers of people claim that the economy is worse for them personally to be perplexing. I think it comes down to gas prices.

First of all, gas prices really putting a crimp in people's budgets. If a family has two cars that get, say, 25 mpg each, and both parents work, they could easily end up spending another $1 a day in gas. Which doesn't seem like much until you compare it to their other monthly bills. Cable. Phone. Electricity.

Then, on top of that, gas prices are ubiquitous. We may not know how much a gallon of milk costs, but you see the price of gas roughly 437 times on the way into work. Big, black and white letters that used to start with a "1", and not so long ago started with "0", now start with "2".

Some of use are old enough to remember when prices shot up through $0.55 a gallon. One gas station in my neighborhood was caught so off-guard, they didn't have any "5"'s to put up, and had to turn the "2"'s backwards. Fortunately for them, prices quickly went to 60 cents, so the embarassment was short-lived.

People remember the last time this happened, and it wasn't pretty. Yes, cars may get better mileage. Sure, oil may be a much smaller part of our economy. I know, it's absolutely a smaller part of the family budget. Thank Greenspan, the Fed knows that printing money probably isn't the best way to control inflation.

But prices are still more likely to go up than down for now. There's a sense that this is going to get worse before it gets better. "Jobs" are proxy for these fear. "Jobs" are a proxy for a "tight job market" which promise a relatively easy answer for the average worker. Now that comfort is gone, and the unease, not yet turned to fear, is strong again.

So, by the way, is the apparently ingrained American resistance to arithmetic. I heard an NPR story this morning that mentioned a woman from Kansas who had put herself on a budget to afford a trip out to California to see her sons. Now, at $2 a gallon, plus 2 cheap motel stops each way, and meals, and she's looking at almost $500. If you want to count wear-and-tear on the car, the extra 3000-mile oil change, the sand-blasting to get the bugs off the windshield (I've driven through Kansas in the summer, folks), and she might want to think about this little thing called an "airplane ticket."

She's so convinced that driving is cheaper than flying, that's she'll put herself on a budget to spend two nights each way in the Bates Motel, super-sizing herself to save money, and paying extra for the AAA gold plan so when the car breaks down 100 miles from the nearest exit she doesn't have to pay an extra $1 a mile for towing.

This woman isn't stupid. Maybe she just likes driving. I do. But I think it's more likely that the local paper, or even the regional one, hasn't bothered to tell her that the reason millions of people will take off their shoes and put their computers in a separate tub this summer is that it costs less.

They're too busy with Abu Ghraib.

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