I was putting away a couple of books last week that I had been keeping in my bedside drawer. As I was putting them away, I ran across a couple of interesting items in them that caught my attention.
In one of the books, I saw a short column I had cut out of a newspaper a couple of years ago. It was written by “Washington Post” columnist, Robert J. Samuelson, back in 2014, concerning the price of gasoline. The nationwide average price of gas was around $2.40 a gallon at that time, down over $1.00 a gallon from the previous year.
About the lower gas prices, Samuelson wrote, “The great oil bust of 2014 is something to behold. Since mid-June, crude prices have dropped roughly 40 percent. U.S. gasoline prices have fallen almost a dollar a gallon. These declines signal a massive transfer of wealth from producers to consumers, estimated to be at about $1.5 trillion annually.”
The clip caught my attention because it appears that we are now in the exact opposite situation. Gas prices are rising, and there now is a massive transfer of wealth from consumers back to the producers. A year ago, the U.S. national average price for a gallon of gasoline was $2.34 a gallon. The national average last week was $2.93 per gallon, a 25 percent increase from a year ago.
What does that mean to our economy? You see the obvious when you head to the pump, the extra $10.00, or more, it takes to fill up your car or truck. What you don’t see is the extra that businesses are having to pay for their fuel. But you do see the increase costs that are being passed along to you. Joe LaVorgna, economist at Deutsche Bank, states that every one cent change in the price of a gallon of gas is worth approximately $1 billion out of the pockets of U.S. consumers.
If the gas prices continue at this level, we are currently looking at about an additional $60 billion extra U.S. taxpayers will have to pay this year. Experts predict that the price of oil will soon start coming down. If not, there goes all the extra money we average Americans were getting from the tax cut. At least the wealthy and the big corporations, including the oil companies, will still have their tax breaks.
As I skimmed through another book I had read, I saw a quote that I had previously highlighted. The book is “Hillbilly Elegy,” written by J.D. Vance. It is an excellent book. The book cover describes it as “A memoir of a family and culture in crisis. And it is. Vance paints a troubling picture of what is happening in much of white working class America. In vivid terms, he describes how globalization, technology, family breakdown, drugs, and mainly, a loss of hope, is affecting a large section of our country.
In the book, he writes how it has affected his hometown. His hometown, Middletown, Ohio, is like so many towns in America. (Ironically, even the name is Middle America.) Middletown has seen its best days. The factories have left. Businesses have closed. But government and civic leaders keep trying, but with little success.
Vance writes, “Efforts to reinvent downtown Middletown always struck me as futile. People didn’t leave because our downtown lacked trendy cultural amenities. The trendy cultural amenities left because there wasn’t enough consumers in Middletown to support them. And why weren’t there enough well-paying consumers? Because there weren’t enough jobs to employ those consumers.”
What Vance is saying is, while they are nice, brick sidewalks and fancy streetlamps won’t bring people back to Middletown. If the jobs aren’t there, young people will leave, if they can. By the way, Vance left Middletown, ended up attending an Ivey League school, and now lives in Columbus, Ohio. (How he got there makes for interesting reading.) And reading is interesting. By the way, I think library cards are still free.
Mac McPhail, raised in Sampson County, lives in Clinton and can be reached at [email protected]