When “tumbling” doesn’t mean Jack; to Joe

“Oil prices tumbled more than $3 a barrel Tuesday…” The choice of words the press uses when talking with oil prices are hilarious; “tumbling…plummets” are but two recent examples of single figure drops in price. You’d think from reading these announcements that oil had dropped by $120 a barrel back to where it should be. Alas that is not the case.

Who fooling who? Are these words the media pick up from the oil companies or are they words the media use to get us to read the article? You’re talking to someone who’s used to paying 0.98 cents a gallon and who thinks $1.38 is expensive. We were led up the garden path a few years ago when the water was tested with gas slowly moving into the mid-$2 mark before retreating. It was done gradually as if to condition us. Then it slid into the $3 range and now to $4+. It’s as if the suppliers were trying to find the point of diminishing returns, which I believe that have found.

The big “however” is that the gas revenue stream back to the producers is now taking in over 3 times revenue per gallon for the same gas quantity as five years ago. Even with reduced consumption, the increase in fortunes for the oil ‘folks’ is giddying. Instead of relying on market elasticity for revenue growth with bigger cars and additional consumption, the price itself has become elastic – in one direction only. And someone’s making a lot of money. At a cost to others.

Is there a snapping point? Granted most people have fixed incomes and cannot afford infinite price increases. That said, the essential driving that people do is to work, school and shopping. Longer trips are expensive; and optional. Aside from changing to public transport, walking or riding a bike, the essential consumption can’t and won’t be curtailed. And that is the consumption line below which we –as a nation - will not go.

Despite all of the hype many ‘folks’ are not hurting. Take the middle class soccer mom who brings the kids to school everyday, shops, plays tennis, and swings by Starbucks. She probably fills her gas tank every two weeks whether she’s driving a minivan or a Hummer. Her gas price has nearly trippled but a bi-weekly additional $60 doesn’t make much of a difference. Similarly for the executive driving to work. It’s the cost of a cheap dinner for two. Worst comes to worst they can do a takeout.

The people who are really hurting are the lower paid workers. And here in America, there are a lot of them. The same ones who get shafted when the price of cigarettes goes up, who got the sub-prime mortgage deals with variable interest rates, who can’t make ends meet with the estimated 20% increase in the price of food. The same people whose sons and daughters are fighting our wars and whose families at home are surviving on food stamps; the average Joe.

I don’t think he, or she, would disagree with my laughing at the words “plummet” to describe what really is a bad joke. The very obvious reality is that the poor are getting slammed yet again.

Just a thought.