Ridiculous Gas Prices

Today, we are taking a day trip to the Bay area for my friend's son's 4th birthday party. When I filled my car with gas for the trip yesterday, I payed $3.93/gallon, and that was after driving all over town finding the cheapest gas possible. Most places were $4.01/gallon or more. Arco was $3.97/gallon. So, out of curiosity I looked up the national average to see what the rest of the country was paying, $3.79/gallon for regular. (Isn't it sad that I think that is cheap right now?)If you drive a diesel, you are really screwed, $4.50/gallon! http://www.fuelgaugereport.com/

We will, like always, be taking my beloved, expensive, gas-guzzling SUV that gets about 17 miles/gallon. Round trip it is about 384 miles to my friend's house. To break it down for you, that is a cost, just in gas, of about $86! But, you have to take into consideration that I have two children that will need to eat at least twice during this trip. While we will be having dinner at my friend's, we will still need to get some lunch on the way there, and, of course, a snack or two during the day. Now, being a family of four, we cannot possibly eat anywhere for under $20 nowdays. And add a few snacks in there and you get, say, $30. So, for one day of fun, it costs $116! That doesn't include the birthday present for the birthday boy.

This is just ridiculous. There is little to no reason for our gas prices to be so high. The middle class will not be middle class much longer. This country, with its "classless society," will soon have only the rich and the poor. A large majority of the middle class will not make it to the upper 10% of the population, but instead fall into the 90% of the population who lives paycheck to paycheck, struggling. If this high price of gas were limited to just gas, that would be one thing. But, the fact is that the high price of gas flows through every other good or service in this country.

Let's examine food for a minute. Take our farmers and how the prices affect them that later flows to us. First, they have to plant their crop. This takes a few weeks to a couple of months, depending on the size of the crop, to work the ground, prepare it for planting. To do such things, they use tractors, which run on, you got it, diesel ($4.50/gallon). Then, they plant the crop, more fuel. Then, they irrigate the crop, more fuel. Then, the crop is harvested, again, more fuel. Finally, the crop is sent to distributors through the trucking system, more fuel, where it is distributed to the grocery retailers, and then to the consumer. Now, with the cost of a gallon of diesel, which is what the farmers' equipment runs on and what the big-rigs run on, the farmers' break-even point just increased (not just in their direct fuel costs, but also in the prices they pay the trucking companies to transport their crops). How do the farmers' then make up that difference? Well, basic economic theory here, they increase their prices to the distributors. Do the distribuotrs eat that cost? Of course not, they pass it right along to the retailers. Well, at least the retailers are already marking up the product for a healthy profit margin, so they are eating the increase, right? Not quite, they are not about to release any portion of their profit margin, so they, in turn, raise the price to you and me, John (or Jane) Q. Consumer. Why? All because our government cannot come up with a way to help alleviate the unnatural rise in fuel prices.

Now, let me pose this question? Are you getting a cost-of-living increase to compensate for this increase? I know that my household income is not changing. And it is unlikely that yours is. Because if it did, the break-even point for the above discussed employers would again increase, spurring them to again raise their prices to maintain their profit margins and the cycle would start all over again. It is the same argument about the minimum wage increases.

My poor kids. What kind of BS will they have to endure? It justs reminds me of the song "To the Class of 1997" (sorry, the artist is escaping me at the moment), When you are older you'll fantasize that "when you were young, prices were reasonable and politicians were noble." Do you think that our parents generation reminsces about such craziness?