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Friday, June 09, 2006

Inflation and Recession Possibility

It makes you wonder if the price of oil can bring on a recession in our countries economy. The price of oil just isn’t reflected in what you pay at the pump it is reflected in almost everything you do day to day. Anything made of plastics that is derived from oil is going to go up in price as much percentage wise as oil has. Everything that has to be transported by truck or by ship or by plane costs is going to go up. Many of the things you use every single day that you take for granted are going to have the cost of that lack of attention go up whether you or I like it or not. Vegetables from California and Florida trucked to the Northeast during the winter months are going to skyrocket in price when the cost of transporting the product exceeds the cost of growing it.

Working for a manufacturer in New England we see all the price increases that come every week. Our field is in Wire and Cable and the costs over the past year alone are insane. There is a saying in our industry that when the down turn in the economy comes we are the first ones as manufacturers hit and the last ones to recover from it.

Everything that we do is surrounded by the use of oil in one form or another and yet our government that still has no long term energy policy and still does not consider this a national topic to be overly concerned with is still doing nothing. We all saw how they looked into the price gouging after Hurricane Katrina and found the oil companies not guilty of the act and moved quickly on to more serious topics like defining marriage and the estate tax. Flag burning is next on the agenda as the price of gasoline will break the $3.00 barrier and stay there because they just don’t see the big picture.

Then again, maybe they see the big picture and will greatly benefit from the big picture. I don’t know of too many elected leaders or the people seeking to be elected that live where most folks do as pay check to pay check Americans. No, I’m pretty sure most of our elected officials in Congress don’t worry about the cost of living.

Ask yourself how much further you can afford for the cost of tanking up your car or heating your home or feeding your family or keeping the electricity on can go before you have to look for extra work? Will that work be available if everyone is cutting back? Will the dollar value of your extra hours keep up with the rising costs of just living the American dream? Getting that annual pay increase from your regular employer is not always going to keep up with the cost of living so what do you do? You cut back. And then you cut back some more.

The American economy is consumer driven and when the American consumers can no longer afford to just get by then they will cut back. When the cut back wave starts, and it is coming or has already begun, many people are going to loose their jobs because of it. People will not be buying the latest model cars and will be making do with what they have. Extras in the budget will be cut immediately without a second thought. Vacations and the money to pay for them will just not be there. Watch the news as companies across America start laying off people by the tens of thousand at a time.

Washington has the energy plan on the table though, it just isn’t important enough to debate yet. Senator Frist has all of our backs. More good government at work. NOT!

America needs real leaders and real people to take on the real issues that effect all of us not just today but down the road. Special interest has been at the feeding trough for so long that it has grown into a beast that is out of control. It’s time for the American people to vote in November and vote out the people that listened to special interests first and foremost. Tom Delay said his goodbye today and he didn’t regret a minute of his service to himself first and his country second. Let’s just see how the trial works out for you Tommy?

The one thing the Republicans forgot about while they were giving billions away to the top five percent of the nation was the middle and lower class majority of Americans. When the cost of living to us is rising faster than we can afford it, we adjust our spending habits and our way of life as we reconsider our opinions and decisions to focus on our priorities. Roof over our head and making sure the kids don’t go hungry. The wallet of the middle and lower class Americans can only take so much abuse before it makes us think that something isn’t right here.

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