State of the Economy
Today gasoline sold for $1.72 per gallon where I live. For the entire year of 2015 consumer prices fell 0.2 percent with huge drops in energy, fuel, and utilities. And because inflation acts like a regressive tax, the past year was most favorable for the poor and the middle class. Rarely in human history do those of us at the bottom or in the middle make out better than do the rich boys and girls at the top. With gasoline and utility bills cut in half, most of us have gained in purchasing power for the first time in many years. And the better news is this: It came at the expense of those who could afford it most: OPEC and the oil companies. Karma is good!
A price war is behind all the favorable numbers. OPEC is going head-to-head against the U.S. shale industry. They have kept production above demand for the past 17 months or so, which in turn has brought the price of oil down from $100 to under $30 per barrel. OPEC has both the oil reserves and the cash reserves to out last those who produce oil from shale. Of course, those of you with hybrid cars can watch this fight go on with big smiles on your faces.
Meanwhile the dollar has risen in foreign exchange by more than 20 percent as our economy continues to grow, our deficits have come down, and our inflation is nil. These results have caused an accelerated drop in oil prices because oil is paid in dollars. World demand has fallen along with the glut of oil, China’s economy has suffered from an overbuilt housing market, and –ouila!—the perfect storm has enclosed us in its arms.
Apart from hitting the Koch brothers and all others in the oil business, stock prices have come down hitting 401(k) retirement accounts by about 15 percent. Stock losses, however, are real only for those who must cash them in and take the losses on the chin. For all others, stock prices will rebound in a year or two.
Now…if I were a Democrat (and I am not), and a candidate for public office (which I am not), I would point to the low gasoline prices, low utility bills, low unemployment rate, low inflation rate, and a rebounding stock market (I predict), and ask: “Who Loves You, Baby?”
Go out there and vote your pocket book.
Odin is right. It seems that the political arena has divided into two camps: those who stupidly believe in divine power, autocratic leaders, the past, are fateful and fearful and deny any intelligent discussion or science… The lowest common denominator. On the other side are people with compassion, believe what science tells them, their own power to govern, the future, and intelligent discussion. I wonder which side, like you do, would be best to be a part of.
Ron