Aren't Lower Gas Prices The Economic Stimulus?

Got gas yesterday in Westwood. (No, this isn’t a story about Rubio’s)

Paid $1.95. Looked around the place, saw a lot of other people paying $1.95. But nobody was smiling. Seems like we were paying at least twice that last summer, so shouldn’t we be ‘pumped’ over this reduction?

A couple rough numbers to consider (broad strokes, don’t get bogged down here): The average American drives a little over 12,000 miles a year and there are about 200 million drivers. ‘Average’ fuel economy of cars on American roads is about 20MPG so those drivers each need about 600 gallons of fuel a year.

At the beginning of last July the national average price for gas topped out at about $4.10. Last week it was under $1.70.

If levels hold (admittedly a big ‘if’), this means on an annualized basis everybody’s got over twelve hundred extra bucks to spend. More than 250 BILLION DOLLARS in American consumer pockets. And that doesn’t take into account the consumer-realized savings that cascade through every business that uses fuel in the creation or delivery of its products. Which would be, I dunno..EVERYTHING we make or sell in the U.S.!

Big news, right?

But I haven’t heard this mentioned by Anderson, Katie or Wolf. They keep saying we’re in “the worst economic downturn since the Great Depression”. It’s a constant drumbeat. And people are scared so they’re holding onto their dough. Smart economists point to the velocity of money flow as an important indicator of a healthy economy. Consumer confidence is the straw that stirs the drink. The money needs to be spent and re-spent for the economy to function properly.

So why doesn’t The Office of the Oprah-Elect want ANY good economic news out in advance of taking the reins? Because any easing of the ‘crisis’ mentality will erode the collective will of all media-susceptible Americans to accept the massive regulatory changes that are about to be enacted. Structural stuff that is not easily undone.

I think we should be afraid of that instead.