Gasoline prices, now averaging $3.62 a gallon, have been identified by Americans as their leading economic concern.
Such worry is one more validation that America is a great country. How’s that? In most of the world, places like the Philippines and China, the price of food, not fuel, is what people worry about.
Yes, we Americans sure like to complain about the price of relative convenience and great luxury. We’ve done so for years. In June 2005, nearly three years ago, a Pew Center survey indicated gasoline prices were the greatest economic concern for 44 percent of Americans, ahead of the federal deficit, jobs, trade imbalance, inflation, interest rates, housing costs and, yes, food prices.
The price of gasoline three years ago was $2.21 a gallon, $1.41 less than today.
To be fair, the price of gasoline affects lower-income people to greater extent than anyone else, and it is certainly a bigger factor in their spending decisions. But there is little evidence to suggest the rest of us are doing anything different because gas costs more money. We still drive, everywhere, most often alone, in high-powered rolling ships that, while more economical than Dad’s ’67 Chrysler, can hardly be called efficient.
What’s the solution to high gas prices? Better asked, what’s the problem? What are we doing without? How has the economy been ravaged? What sacrifices need to be made by Americans, most of whom have never been asked to sacrifice anything?
No recent political economic proposal been more thoroughly dissed than that of John McCain, the Arizona senator and all-but-assured Republican presidential candidate. McCain suggested a moratorium on the 18.4 cents per gallon federal fuel tax from Memorial Day to Labor Day, a move that would drain $10 billion or so in federal road construction funds and – maybe – reduce the price of gasoline during the summer travel season, encouraging Americans to drive more, increasing consumption and likely raising the price of fuel. That’s unwise public policy.
Sen. Hillary Clinton jumped aboard the tax moratorium SUV, and she rolled out that worn-out Democratic solution, the windfall profits tax on Big Oil, to make up the difference in tax revenue. Puh-leeze.
Everyone likes to blame Big Oil. Consider, though, that Exxon-Mobil’s first-quarter profits of $10.9 billion represented 9.3 percent of revenue. Microsoft, another company everyone likes to blame for something, had first-quarter profits of $4.39 billion … 30 percent of its revenue. Yes, Big Oil’s revenue is at record-high levels. But why? World demand for oil is outpacing world supply, driving price higher. The U.S. dollar is limp as a wet noodle, meaning it takes more U.S. dollars to buy a barrel of Saudi Arabian oil. It all adds up to more money going out the doors of American families, and out of America as a nation.
It that a problem? Arguably, yes, but apparently not of a magnitude sufficient to attract serious attention, at nearly any level.
If America and its government are truly worried about gasoline prices, we should let the market drive.
Even-higher gasoline prices – and they’re coming, dear readers – might force changes in personal spending habits, might drive more capitol into innovative transportation solutions and alternatives, and might wean America from its “dependence” on foreign oil.
Until then, we’ll keep pumping, paying, driving and complaining.