Gas Prices

So what has caused the economic downturn in the United States? Housing? Credit Crunch? Unemployment? Well, I am a firm believer that the reason we are in a recession is the simple fact that gas prices were astronomical last summer. Before you dismiss me as crazy, try this theory on for size (which I have been saying since January and even heard some economists recently acknowledge the same thing).

Last summer, gas was hovering around 3.99/gallon in NEPA and Central Penn areas. Compare to that nearly $5 a gallon some people were paying in the Midwest and on the California coast. Well, now its easy to see why the gas prices and "American Greed" contributed to the economy. During the "prosperous Clinton Years" people were allowed to buy $400,000 homes in suburbia because they wanted to commute 50 miles to work each day . All that is fine if gas is, say $1.75/gallon, but when it climbs to $3.00 it becomes a little unaffordable. Well, people were faced with a harsh reality at the end Bush's term (which is a direct result of economic policies put in place by Hilliary and Husband). That reality is simply either drive to work, pay $400/ month in gas to get to work and hopefully make your mortgage. Guess what they couldn't! This in turn lead to the credit crunch. People couldnt afford to make payments on their houses or put gas in their cars or even pay for food in their houses, and eventually they began to max out credit cards. So now you have a whole lot of Americans with outstanding debt and foreclosed houses. Why? Very simple. Gas Prices....Let me put that into terms anyone reading this blog from around the world can understand....American Greed!

All this happening while Exxon, Chevron, Valero and Shell were turning in record profits. EVERY company in the US was turning in losses and these companies were turning record profits for a quarter...3 months!! For the year of 2008, Exxon made a stagerring profit of $45.6 BILLION dollars. Think about that for a minute. That profit is after they have paid all their employees, covered their costs, and paid off their politicians in Washington (oops didn't mean to type that.) Think about this also. According to Exxon we should be conserving gas to drive up supply and drive down demand. 2 things kill this suggestion 1) During the 90's, our refinieries were operating at 92%...Last month, the month before the summer driving season, they were 81%, and 2)Exxon exports more oil and gas to other countries instead of keeping it in the US because they can make more money. Considering the trend will be to drive prices way up this summer again, and you will see on the economic scale go down, then level off, then down, then level off, down, etc. Notice it nevers go up and this trend will continue until they realize gas prices are driving this economy or we are in a depression...I bet the ladder.

The gas and oil companies in this country have the power. All I know is at least the previous administration attempted to address these prices, whereas the "hardest working Congress" and the President have not alluded to these prices since taking office despite making numerous promises during his campaign that he would. Maybe Exxon has paid the Dems in power to hide under rock. Or they give Pelosi free gas for her jumbo jet to fly back and forth to California. Either way, if nothing is done to address the greed of these companies, we will be at the same point again next summer, and the Libreals have no one to blame but themselves this time. Thats all I'm done!!!

Photo taken from www.acartoonist.com/exxon.jpg