Economic Realities Completely Ignored


I have been surprised by the cavalier attitude I’ve seen about the rising price of gasoline and its impact on the average family or community in recent weeks and months, but I’ve been even more surprised by this attitude being parroted out by the media, the so-called cultural “elites,” and even people I know personally.

It’s like they’ve all lost any sense of what it feels like to have a finite weekly or monthly income and a budget to live within, isn’t it? What a fortunate, but dangerous, position to be in — to be so comfortable financially that you no longer feel empathy for others who aren’t in the same place. It is maddening. Even more baffling are the talking points that seem to try to fit the rising price of gas into a couple of nice, tidy buckets, and try to convince us that it’s our duty as human beings to just suck it up and make the best of things.

“If we aren’t going to import Russian oil, then prices are going to go up. Think of the people of Ukraine! It’s the humane thing to do, pay more for gas and use less!”

“If you can’t afford to fill your pickup truck with gas, just go buy an electric car! You won’t have to worry about gas, and it’s so much better for the environment!”

“Oil and gas companies are getting RICH off of these increased prices and we need to tax them more and further regulate their business!”

“Let’s just give every family making 75K or less $400 per month to help offset the higher cost of gas!”

Each of these talking points on their own is so stupid, they barely merit a response. Taken together, though, they illustrate an astonishing lack of serious consideration or care for the lives of average Americans, and a jaw-dropping underestimation of their intelligence.
Let’s just think about how a doubling of the price of gas could impact a small community like the one I live in: Rockport, Texas.

Rockport is a lovely community on the Texas coast and a favorite vacation or second-home destination due to its plethora of fishing, birdwatching, restaurants, art, and beaches. But it’s also a working community of year-round commerce for its full-time residents and the surrounding area. It is experiencing a period of explosive growth following the recovery from Hurricane Harvey five years ago, as well as the current exodus to smaller communities as a result of covid restrictions and other policies in larger cities.

Finding affordable housing in Rockport for the workers who staff its businesses is extremely difficult, if not impossible. So, many of these workers actually drive to and from Rockport daily from other communities in the area like Portland, Ingleside, Aransas Pass, etc. There may not be the traffic headaches of larger cities, but the cost of that transportation is definitely no small factor for employees or employers.

We are starting to see the stress that the rising cost of gasoline is causing in the economic ecosystem. If a weekly gas fill-up was $40 a year and a half ago, it’s now $80 or more. For families on a tight budget, that is going to start to change consumption and behaviors pretty quickly. Less disposable income to spend on school field trips, community events, and eating out doesn’t just impact their family. It begins to impact other families and the larger community, as well.

If fewer people are eating out, the restaurants will need fewer employees. The employees who remain will make less money in tips and likely work fewer hours. Many may decide that the daily round-trip drive to Rockport from Aransas Pass costs too much to make the job worthwhile. That becomes a vicious cycle for the restaurant as well as the employee. With fewer employees, service will likely suffer. As service suffers, business further decreases. Lather, rinse, repeat until the daily grind of the hospitality business can no longer support the family who owns the business, much less those who work there.

The rising cost of gasoline isn’t just a one-off budget item, either. It impacts everything else, because by definition the cost to deliver goods—be it equipment, groceries, or other necessities—increases and those costs are passed on to the consumer as well. So, not only does that increased weekly cost of gas in the tank bust the budget, and disposable income decreases, the costs of every other necessity goes up, too. There can be no increase in wages expected because the employers are all trying to make adjustments for all of their increased costs and changing behaviors as well. And when the inflation rate outstrips any increase in wages, people begin to feel like the deck is stacked against them, even with the most optimistic attitude.

It’s not just the cost of delivery of goods, it’s also the goods themselves. When it costs a farmer 300% more to fertilize his wheat and corn than last year, and twice as much to pay for the fuel in their tractors, trucks and equipment, the cost to produce our basic staples goes up and the price of products made with wheat and corn go up as well.

“Well, we all need to reduce our gluten intake, so just don’t eat bread. So what if flour goes up? We shouldn’t be eating it anyway.” Or, “I’m not a big fan of corn. Guess I just won’t buy corn anymore at the store.” Really? Corn feeds beef, pork, poultry and everything else. Increased costs equal increased prices. Ethanol is produced from corn as well. Most gas at the pump has an ethanol component, so increased corn prices impact us in far more ways than just the vegetable itself. And what about dog food? The price to feed and care for a pet will increase as well as ingredients become more scarce and more expensive.

As all of these costs continue to spiral up and families are impacted more and more, economic activity will slow down or even stagnate. That creates a terrible situation. Tourists will think more carefully about jumping in the family SUV and heading to the coast for the weekend. They will more carefully consider expenses and maybe stay closer to home. Winter Texans will figure out a way to stay warm closer to home. Travel becomes a much bigger expense — not just for gasoline, but for lodging, food, and everything else. When that starts to happen, all of the problems discussed thus far increase exponentially and reverberate far beyond the city limits of any one town.

Rockport has shown its resiliency over and over through the years — from hurricanes to floods to increasing immigration to the economic disaster of the pandemic. If one factors in the higher costs of living and a very real probability of economic slowdown on the horizon, it’s not hard to imagine the malaise that is going to begin to set in after five-plus years of extreme cycles of feast and famine. People are doing their best just to get by, and it seems like all of the causes of the current uncertainty seem so arbitrary and unnecessary. This has the potential to create restlessness with the status quo and deeper divisions in a community. And while I am using Rockport as an example, the situation is not geographically unique. These issues and more will impact all of us, regardless of where we live.

As I reflect on this and watch the news, I harken back to my economics and history classes and shake my head. It’s as if no one calling any of the shots right now has studied any of it. It would do all of us well to educate ourselves and do what we can to prepare for the coming difficult times ahead. Now is not the time to stick our heads in the sand and care only for ourselves. These conditions are going to impact all of us, and we should all remind ourselves that there are going to be a lot of our fellow citizens who do not have the same kind of rainy-day resources that we have built for ourselves, and we will need to be ready to help however we can.
It’s been 50 years or more since this kind of economic environment was in the picture. We have been very fortunate to have experienced the relative ease that comes with a buoyant, expansive and healthy economy for most of our lives. We are not a country that is accustomed to dealing with or having less access to anything. That is about to happen, and we need to prepare ourselves and our families for it.


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