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The Economies Gas Pains Need More Than A Laxative
“Stopped at the supermarket to get myself something to eat,
and when I looked at the prices, they knocked me off of my feet.
I was in the baloney section, and I had to take myself a close look,
Abdul Jabber couldn’t make these prices, with a sky hook”.
Johnny “Guitar” Watson, “Ain’t that a Bitch” 1976
The late 1970’s and early 1980’s were about more than the death of Disco and the birth of Punk Rock. These two events were actually symbolic of the economic times affecting the United States and the entire world. While Johnny “Guitar” Watson lamented the state of the US economy, the Sex Pistols were advocating “Anarchy in the UK”.
Many consumer’s too young to remember the oil crisis of the mid 1970’s or the financial difficulties of the early 1980’s are experiencing for the first time the economic hardship of rising prices for food, natural gas, electricity, oil and other commodities dependent on the cost of energy. Older consumers can recall only being able to purchase gasoline on “odd or even days” and that locking gas caps came into existence to prevent people from stealing fuel from their cars. Comparing the economies of 1980 and 2008 are reminiscent of Yogi Berra’s immortal phrase, “its deja vu all over again”.
Until recently, the United States economy has enjoyed an overextended period of unprecedented growth that created the expectation of unrealistic standards of living for the average consumer. Consumer goods that were once considered luxuries are now necessities.
The average consumer in 1980 somehow managed to survive without cable television, many did not have a dishwasher or color television, name brand products and new cars were only purchased by the rich and cellular phones and the internet did not exist. While the average consumer may feel poorer today, many enjoy a standard of living that was previously reserved for the wealthy.
In the early 1980’s the United States economy was experiencing double digit inflation, unemployment and interest rates. Working a second job to supplement income was commonplace for a middle class that resided in modest one bath homes and considered going to a restaurant a special occasion. Consumers lived within their means and considered having health insurance or money in a savings account more important than having an the latest technology or leasing a new car.
Media and the access to information provided by the world wide web feeds us a daily diet of gloom and doom reporting that makes consumers feel that the economy has never been worse while generating increased ratings for their programs and more page views for their websites. Historians and the general public have been predicting the end of civilization since the fall of the Roman Empire yet the human race has managed to overcome war, plagues and other ills while making great gains in medicine, civil rights, quality of life and other areas.
2008 is a presidential election year and the economy along with the Iraqi War is sure to be a major issue in the upcoming debates between Republican candidate John McCain and Democrat Barack Obama.
Rather than expecting the next president to solve all our problems while maintaining the status quo of our over indulgent consumerism, we as a nation need to reassess what is really important in order to move forward. Creating one economic bubble after another may have kept consumers happy but at the expense of the long term health of the financial well being of the United States economy.
Our current economy is similar to a sick patient who needs to take the proper medicine to cure itself. Like many illnesses, the cure may be painful, unpleasant and take time. Frequently the patient must feel worse before they can regain their health. During the darkest hours of WW II the world saw little hope for the future yet somehow things managed to improve.
Periodically the course of history creates bad times to be a president or politician. Former President Jimmy Carter was a great humanitarian who was a victim of the ebb and flow of economics and world political events. The same case can be made for current President George W. Bush regardless of your personal opinions. Problems in the Middle East have a tendency to sink presidential ratings and create worldwide economic instability.
The US economy may be experiencing difficulties but things have been much worse as recently as 1980. Financial news reminds us daily of the weakness of the US dollar and strength of the Euro yet downplays the fact that the European Union is currently being plagued by oil related strikes and acts of civil disobedience associated with rising prices. Emerging economies in China and India have subsidized oil to maintain prices to insure continued economic growth and the stability of their governments. The cost of these subsidizes has caused many developing nations to increase oil prices and the resulting political and economic ramifications are just beginning to surface.
When considering the current state of our country or which candidate we will vote for in the next election remember the old Italian expression about “crying with a loaf of bread under your arm”. The economy may not be as robust as we may wish but things could be much more difficult. Politicians wanting to have long political careers have a tendency to tell voters what they want to hear so turn off your iPod and vote for the candidate who prescribes the most distasteful medicine to cure the patient. The US economy has the flu and needs to recover quickly.
