What to do about what's really stoking inflation
Back in the 1960s, if you were bored, at loose ends, or just wanted to clear your head, you might up and "go for a drive." You'd fire up your turbocharged 15-miles-per-gallon muscle car and aimlessly tool around for a bit; you might even get on the interstate and put the "pedal to the metal." And why would you burn through an irreplaceable finite resource in such a wasteful, improvident manner? It's because back in the sixties, gasoline was cheap — really cheap.
But then the 1970s rolled in, and our thoughtless regard for fossil fuels got tweaked a bit when prices rose and folks had to start queuing up to fuel up. Americans could no longer take for granted an endless supply of cheap gas, and worse, the U.S. was becoming ever more dependent on imported oil. So celebrities, back when celebrities still had some class, took part in a PSA campaign that urged conservation of our "precious fossil fuels" with the slogan Don't Be Fuelish:
But we adapted. The speed limit was lowered, cars got better gas mileage, gas prices moderated, and concerns about shortages receded until 2008, when a barrel of Brent crude oil soared to its all-time high of $147.50. However, ten years later, the ramping up of fracking made America "energy independent" for the first time in decades. The point here is that the price and availability of oil have been an issue for 50 years, and we're still grappling with them.
The first thing that the Current Occupant did on the energy front was to reverse President Trump's sensible energy policies. And once again, the price of oil has gone up. In March, the price of a barrel of Brent crude traded for more than $130 a barrel, a price that analyst Michael Rothman says that, if sustained for a year, would "act as a dampener of economic activity." Some say the dampening effect on the economy begins at oil prices that are much lower than $130.
With the price of gasoline recently at an all-time high, "man in the street" interviews occur at gas stations, and the consensus gripe there is that, to adapt a slogan, the gas is too damn high.
The media's focus on "personal transportation" and how much more it's costing individuals to move themselves around in their cars is misplaced. The far bigger impact on inflation that the historic hike in fuel prices poses is not for cars, but for far bigger machines. It's for semi trucks, oceangoing container ships, farming and mining machinery, etc.
Personal transportation includes an array of options not available in trucking, shipping, farming, and enterprises that require heavy machinery. If personal transportation by car is getting too damned expensive, individuals can take public transportation, they can carpool, they can bicycle to their jobs; hell, they might even try walking, running, or some other option.
But if one needs, say, a replacement hard drive to install in one's old computer, it'll need to be shipped across the Pacific Ocean. And when a grocer needs to restock his shelves, he'll need a trucker to bring him the food to replenish his stores so the rest of us can eat. There are no viable options.
Consider: semi trucks get on average 6.5 miles per gallon. And what semis and other big machines burn is diesel fuel. Diesel is what's really stoking price inflation.
On March 30, CNBC ran "Everyone is worried about gas prices, but diesel is driving inflation more than you think," which reported that the national average price for diesel is $5.12 per gallon, whereas for gasoline, it's $4.23.
"The spread between diesel and motor fuel is the widest it's ever been in the data," said Mark Zandi, chief economist at Moody's Analytics. ...
But for goods price inflation, for everything from production to shipping, the contribution of diesel prices to inflation is even greater. Zandi calculates that 17% of the acceleration of goods price inflation is due to the higher diesel costs. ...
Zandi said higher diesel prices spark an inflation that is "corrosive to the economy's ability to grow[.]"
"The world's businesses run on diesel, and diesel is at record highs ... and that's bleeding into inflation.
On March 31, the New York Times ran "Soaring Cost of Diesel Ripples Through the Global Economy" (italics added):
Farmers are spending more to keep tractors and combines running. Shipping and trucking companies are passing higher costs to retailers, which are beginning to pass them on to shoppers. […]
The source is the sudden surge in the price of diesel, which is quietly undercutting the American and global economies by pushing up inflation and pressuring supply chains from manufacturing to retail. It is one more cost of the war in Ukraine. Russia is a major exporter of both diesel and the crude oil that diesel is made from in refineries. […]
“There is some terror” in the diesel market right now, said Linda Salinas, vice president for operations at Texmark Chemicals.
Biden's inflation has been stoked more by fuel prices for creating and transporting goods than by fuel prices for cars. If old Joe isn't going to do what's necessary to increase the supply of oil, then the individual should — by lowering demand.
The way Americans can lower demand is not merely by driving less, but by taking part in a general consumer strike. It's all that stuff in the stores that's the real culprit, all that stuff that must be transported by diesel trucks. Now is the perfect time to go on a diet, to economize, to start saving money by not buying stuff.
Some Americans are already effectively on strike, as they can't afford high prices. It's the folks who can afford to pay Biden's inflated prices who need to embrace a consumer strike.
The price of oil must have figured into Putin's decision to invade Ukraine. Some Americans have said they're willing to pay more for gasoline if that means hurting Putin and helping Ukraine. That's admirable, but those individuals don't grasp supply and demand. If you want the war to end, cut your demand for fossil fuel. That'll get Putin's attention.
The more uncomfortable question for those who hate the war in Ukraine is not are you willing to pay more, but are you willing to drive less?
Some Americans might not want to drive less, consume less, and change their behavior, thinking prices will eventually come back down. But in Biden's America, prices aren't supposed to go back down. High fuel prices "aren't a bug, they're a feature"; they're a deliberate part of the plan to force us into a new Eden of electric cars and a cooler climate. Since that's all decades away, it's left to the individual to resist the Democrats' social engineering by going on a consumer strike. Let the products in the stores pile up and gather dust.
Biden's release of oil from the Strategic Petroleum Reserve is reckless. One lone senile old man shouldn't have the power to endanger America so. Where's Congress?
Biden is unlikely to do what's necessary to increase fuel supply because it would entail reversing policy. Biden is much too small a man to admit that Trump's energy policies were far more intelligent than his.
So it's the high price of diesel that's eating us alive. If this has made you feel uncomfortable (or even "out of sorts"), don't "go for a drive"; go for a walk instead. Also, don't spend money on things you don't need, and prices should soon start falling.
Jon N. Hall of ULTRACON OPINION is a programmer from Kansas City.
Photo credit: Pxhere, public domain.