Thursday, May 13, 2004

ITYS: Wholesale prices climbing

File this under ITYS (or I Told You So!):

The big news today is that wholesale prices are rising and retail sales are dropping. The reason given? The rising price of gasoline, of course!

Shocked? Why? Guess who has been warning you that this was coming? I was! I kept on saying that Bush Junior needed to do what he could to address this issue if he wanted to keep the recovery going. (Then again, I was also the only one warning people of the recession as far back as 1998 and nobody listened to me until after it was well underway in 2001. Such is the curse of being right.)

The price of gasoline cuts into the overhead of all businesses that have to transport anything by vehicle. Truck, train, boat, plane... it doesn't matter. The more they have to pay for gas, the more they have to charge customers to make up the difference. the higher the wholesale prices go, the less money people have to spend on things. Bye-bye recovery.

Right now I don't know if anything can be done to salvage this either, especially in time for the November elections. Remember, gas prices can rise on a dime. King Faoud over in Saudi Arabia can sneeze and two seconds later pump prices go up a penny per gallon. But it supposedly takes six weeks to six months for those same prices to fall.

An extreme solution? Fire the EPA and suspend the chaotic rules for gas production. Come up with one concrete refinery process for all 50 states - the Periodic Table and the chemical composure of smog do not change per state. Gas blends shouldn't either.

Also, suspend the federal gas tax for six months or until the national average gas price remains below $1.50 per gallon, whichever comes later.

Extreme, but it should help.

Also extremely unlikely anyone with some DC stroke will try it. The White House doesn't want to deal with this issue, and it probably will kick them in the posterior come November.

Brace yourselves, folks... this is still just the tip of the iceberg.

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