Registered: May 2003
Local time: 08:47 PM
Location: Delta House
39 million reasons why $3 gas may change America
By Reed Saxon, AP
Business is brisk at a Los Angeles gas station, where regular gasoline is priced at $3.15 per gallon.
Just how big a deal is $3 gasoline? For those with six-figure household incomes it's an annoyance, but little more. Evian spring water goes about $6.80 a gallon when purchased in one-liter bottles.
For those in the tap-water brackets, the situation is a bit different. For many of the 39 million households making less than $30,000 a year, the difference between $2 gas and $3 gas is the difference between spending 10% of income on gas and 15%. In a word: Ouch!
It's hardly surprising, then, that politicians from President Bush on down to local legislators are popping up with quick-fix proposals. Bush's plan to suspend deposits into the National Petroleum Reserve and to push for more lenient pollution standards would have little impact. Just as useless are calls for a tax on oil company profits and the partisanfinger-pointing of many in Congress.
It's easy to chalk this up as the inevitable political posturing that follows economic stress. But it is also perhaps the most visible measure of the inability of the nation's leaders to speak the truth about long-term problems ? Social Security, health care and runaway spending to name three others. Today's high oil prices are the result of a quarter-century of low prices coupled with robust worldwide growth and instability in the world's oil-producing regions. Any meaningful energy polices will take years to unfold.
If all the posturing seems inevitable, it is because the truth ? that everyone will need to adjust to a new reality ? is politically unpalatable. But people will learn that truth anyway, and perhaps what follows can give rise to leaders with a longer vision. Or, in a darker view, to a more ominous national division.
In a society with acute differences of wealth, it's not hard to see other economic developments becoming political flashpoints. The surging cost of health care ? and its unavailability to many ? could easily trigger a hostile class fight. In many areas, housing costs are creating a wealth divide between those who own and those who can no longer afford to buy in. And, in the long run, the unsustainable amounts of money the government spends on retirees could trigger more generational resentment than sound policy discussion could.
Demagogic politics go hand-in-hand with class division. And those divisions are bad and getting worse. According to a Federal Reserve study last month, the 56 million households that make up the bottom half of the economic ladder owns just 2.6% of the nation's wealth. That's down from 3.6% a decade ago. The top 10%, meanwhile, accounts for almost 70% of the wealth.
That will likely fuel contentious debates for many years to come. You can hear the shouts beginning when people pay $3 a gallon at the pump.