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The Great Recession…That Never Was

I recently watched several TV journalists and read a dozen or more articles about how devastating the current price war between OPEC and the shale industry oil producers is affecting our economy and our way of life. Several commentators said that we are teetering on the brink of recession, perhaps even a depression. Could this be true ? My intuition meter said “No way, Jose.” Still they had their assertions, while I had a calculator, the keen mind of a third grader with steely fingers, and malice toward none to guide me. The odds were in my favor.

This was definitely a job for Super Ed, his profound powers of investigation, and his standby 3rd grade calculator. Besides I had three minutes to spare before my second cup of coffee might divert my attention away from the task. So here are the numbers and my conclusions:

• All Americans are better off with lower gasoline prices, lower heating and/or air conditioning bills, and across the board lower expenses in food, fuel, housing, health care, and transportation. In contrast, those who are employed by the oil and gas industries are being the hardest hit.

• There are 300,000 workers in the oil and gas industries, and 145 million employed in total. Those numbers alone suggest that 2 percent of the workforce are worse off, while 98 percent are better off.

• A quick estimate shows that we each are saving about $300 per month over our spending patterns of 8 months ago. Those numbers arise out of gasoline savings ($133 per month), utility bills ($133 per month), and all other categories ($34 per month). Cross multiplied those numbers give us a figure to $43.5 billion in monthly savings.

• If one-half the oil and gas industry employees have been laid off, they still each face expenses that are $300 per month less than before, and unemployment compensation to help them through. That comes to $165 million per month flowing to them to help out.

• It is true that 401 (k) plans as well as private investment accounts are down by about 15 – 17 percent. Still, those same plans were up by more than 150 percent since 2009. Only those who by personal circumstances were forced to sell at losses actually realized any losses. These numbers are well within normal market conditions.

My conclusions: The death of the American economy and her workers is greatly exaggerated. Indeed, on balance we are, as a nation, a whole lot better off now than we were before all these numbers came tumbling down. Shame on you reporters of fiction. Thank you, OPEC.