When in Doubt, Do the Obvious
The price of diesel fuel has doubled—up 22% in the past two months alone.
Particularly hard-hurt are cross-country haulers, fishermen and heavy equipment operators, who are paying roughly $4 for a gallon of diesel. To fill his giant 200-gallon semi, independent trucker Bob Kuzniar has to pony up $800.
Exorbitantly high fuel prices mean that Kuzniar and his colleagues nationwide are earning less and less. Some are being forced out of business with large payments due on their rigs and have little hope of avoiding bankruptcy.
Does a solution exist?
Life at the Pump
It costs $40 to $50 to fill up my car with gas. I would happily drive a small car if everybody else also drove a small car.
But driving a Mini Cooper, SmartCar or VW Bug and tangling with a giant SUV or pickup would most likely leave me smooshed flatter than a pancake.
Sometimes on the opposite side of the pump I will see a huge gas-guzzler filling up, which always makes me curious: What does it cost to fill that thing? When the monster vehicle next door leaves, I go around to see how much the sale was.
More often than not, the amount is $10 or $15—just enough to get the driver through the next couple of days.
It is there that I am reminded how $100+ for a barrel of oil cuts deeply into discretionary income, which results in less spending elsewhere—retail stores, restaurants and Starbucks, for example.
Factor in the current frenzy to manufacture ethanol, which has driven up the price of corn half again of what it was a year ago, and food prices are way up—along with everything else. The farmers are happy, but the poor suffer.
This is a textbook formula for stagflation and stupidity.
All this is in addition to the subprime catastrophe, which simply adds fuel to the recession.