Stoneage Ramblings

By John R. Stone 

We’re in the heat of election season and the television commercials are pretty nasty.

I’ve always felt that nasty commercials tell me as much about the sponsor of the ads as the person targeted. If you’re going to go that low to get elected what other shenanigans are you going to think are OK when you are in office?

A couple of males have been advertising that if they are elected Congress they will fix everything. I always get a kick out of that, as Congressmen they will be one or two of 435 people and nothing happens at all unless 218 of those people can agree on something. And, if they agree, their legislation must be approved by the Senate and later signed by the President.

And some are critical of high gas and grocery prices and we are to assume that they will solve that problem too. But they never say how or what proposals they would support that might make a difference.

Gas prices are based on the international price of oil because we import oil every day. Part of the reason for importing is because it can be cheaper because much foreign oil is easier to refine than some US oil.

With many of the world’s nations punishing Russia for its invasion of Ukraine and therefore not buying its oil, the price of oil has increased. Some nations like Saudi Arabia, which can see the end of its oil producing days, are content to live with the higher price and bank more money while the boom lasts rather than increasing production which would lower prices.

U.S. producers, seeing the push for less use of carbon fuels, are not investing as much in refineries or other necessary infrastructure and are content to take in the profits from the higher prices of today. They see the future of fossil fuels is limited although they are bound to be with us for generations simply because there are not sufficient alternatives at this point.

Getting gas prices lower quickly would require the US importing more oil. That means dealing with Vladimir Putin, Nicolas Maduro of Venezuela, Prince Bin Salman of Saudi Arabia or Iran. All are essentially dictatorships that would like nothing more than to put their hands to our throat.

Crank out more oil here? Sure, we can do that, but we don’t have the refining capacity now to make a difference right away. Stop exporting oil? Some of what we export we can’t efficiently process anyway.

Inflation is another issue without an easy answer. It started largely because of the pandemic which resulted in business interruption, supply chain issues, pandemic relief funds sent to citizens by two different administrations in Washington, the war in Ukraine, changes in working such as working from home, to name just a few.

The money made us poor consumers. Normally consumers keep a lid on inflation with their shopping habits. If something becomes too expensive they substitute with something less expensive or do without. The business challenge is to always have the edge by having a better product for the same money, finding a similar product for less or to become more efficient and reduce overhead costs.

So while the money provided a lifeline that kept the economy running it may have been more than necessary.  The Federal Reserve System is trying to cool things off with higher interest rates to stop the cycle of price increases. The hope is for a “soft landing,” a reduction in inflation without a recession.

There are few easy answers, but the ads of TV don’t offer answers other than “vote for me, I’ll fix it.”

If it was as easy as they seem to make it, it would already be done. Competing interests obstruct change; to which such interests will these candidates succumb? It would be nice to know before casting ballots!