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Prices, politics and Otter Pops

Right About Now

Posted: May 23, 2008 3:05 p.m.
Updated: July 24, 2008 5:02 a.m.
 
I just paid 70 stinking dollars to feed that gas-sucking minivan of ours. That's a seven (7) and a zero (0). I remember paying 35 bucks to fill the tank back in 2000 when we bought it new. And, on top of that,
going to Ralph's got a whole lot more expensive, too. Have you seen what a dozen eggs goes for lately? About $3.50 to $4. I feel like I need a second mortgage just to feed my starving crew.

When I was a kid, 50 bucks would fill a grocery cart with good food - steaks, chicken, veggies and Otter Pops. You oughta have an Otter Pop. Gas was 60 cents a gallon and we would actually go to a different gas station to save a penny or two. We could hop into our '66 Ford Mustang, hit the gas and cruise to the beach without a care in the world. Now, the Mustang sits in the garage while we tool around town in the Honda.

The green Honda.

Who is to blame for this? Surely, there has to be a scheming, conniving capitalist behind this somewhere. "The Man" is sitting in his big, comfy, black leather chair grinning at the pain and suffering he is causing while raking in huge profits from his nefarious scheme. He must be doing this one-handed since the other hand must be used for keeping minorities down. Because he is "The Man."

President Bush is being blamed by Nancy Pelosi and the irrational Left for the current economic situation in the country - is it really his fault? Some, but mostly it is due to circumstances beyond his control.

"It can't be," shriek the Democrats. "It wasn't this way when Bill and Hill were in charge! Everything was perfect when the Clintons ran things!" Well, no it wasn't but the Clintons did benefit from a good economic cycle and a strong economy. However, many events have occurred recently that have created somewhat of a "perfect storm" for the United States and World economies.

One of the largest contributing factors is China's rapidly growing economy. With annual growth rates of 9 to 10 percent, China has become an industrialized giant with an incredible appetite for fuel according
to the Brookings Institute. In 2005, China used 10 percent of the world's energy but is well on its way to using 15 percent. This rapid industrialization has also caused a mass migration into the cities of
rural workers. This urbanization has increased food demands as well, making China a major player in food markets as well as energy.

India's growing economy has also had a profound impact on the world stage. Auto sales in the former Jewel of the Empire have skyrocketed with first time auto buyers at 70 to 80 percent. GM has introduced a car that retails for 309,000 rupees (about $7300). Renault is working on a car that sells for 120,000 rupees ($3,000). I guess that the next time I go buy a car, I'll pay in rupees. All of these new cars mean much more fuel consumed in India.

All of this fuel usage in rising economies is leading to the rising cost of oil, the outrageous price of gas at the pump and our frustration. But there is a much darker side to these rising costs. The incentive for
farmers to sell crops for fuel use is much greater now than in the past since they can make more money in ethanol than feed stock. We can't blame the farmers - we'd do the same thing in their position. However,
this does not change the harsh reality that food is being diverted from people's dinner plates into gas tanks.

Unfortunately, there is an area of blame that is involved with capitalism. Speculation in food markets has driven up prices far beyond normal levels. The United Nations recently blamed food speculation as the reason for its $755 million dollar shortfall in meeting all of its food supply obligations. With instability in other markets such as banking and real estate, food speculation has attracted far more investment dollars seeking easy returns. This has driven food prices to record levels. The impact has been seen in the evening news in places like Mexico, Haiti and Somalia where food protests and riots have erupted. Lesser-known is the drought in Australia that has reduced that country's rice output by 98 percent. Pictures of a cracked and barren Outback were recently shown in leading news magazines.

Is President Bush completely innocent? Of course not. The lax banking practices encouraged by this administration contributed to the current mortgage crisis. The selling of bad loans as investment vehicles to major banking firms (Bear Stearns) was overlooked by Federal Regulators and allowed to proceed. However, the original vision of helping people obtain the American Dream has been lost in the wreckage of the mortgage industry failure.

Unfortunately, all of these factors combined together have created a very bleak economic portrait for America and the world. Did it really matter who was president? Not really, but the Left will continue to
vilify President Bush simply because of who he is. Americans will need to tighten their belts and weather the storm as we always do. Pass the Otter Pops.

Steve Lunetta is a Santa Clarita resident. His column reflects his own views, not necessarily those of The Signal. "Right About Now" runs Fridays in The Signal and rotates among local Republican writers.

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