Bernie Bravo, who with his wife owns Cascade Landscape & Irrigation Inc. said his gas costs have tripled, from $3,000 a month several years ago to $9,000 a month this year.
Carol and Bernie will try to pass along some or all of the increased cost to their landscaping customers, but are afraid of losing customers if they do. If Carol and Bernie and you and I can't pass along our rising costs, we will either have to borrow to maintain our consumption, dip into our savings savings, or cut back somewhere. Maybe we eat out less, stay at home for the vacation, switch from Meier & Frank to Burlington Coat Factory, or rent a movie instead of going to Regal Theaters or ask for a raise.
That's not what our governments do! They just spend more each year, year after year, and either tax us more or inflate, which is the hidden tax that Carol and Bernie and you and I are wrestling with.
Energy and Food are consumables and are somewhat tied together, since rising energy costs impact food costs directly - being that a great deal of our food moves by truck.
Our high gas prices are not due to inflation. They are due to the grossly higher demand for fuel in developing nations, as well as our continuing rise in the US. While the US demand for fuel has risen about 20% in the past several years, it has nearly quadrupalled (double check my numbers, but you will get the idea) in China, as they reap the technological benefits of capitalism. Our fuel prices have been artificially low because of diplomacy with oil rich nations anyway. We paid a buck a gallon, when Europeans were paying 3 bucks a gallon. At the same time, the US cannot produce more gasoline from crude oil than we currently do - our refineries are at about 98% capacity. So the problem isn't even a shortage of oil - OPEC has actually offered to increase output to prove that to the market movers - but we are starting to look offshore for our refined products too and that costs a lot more than doing it ourselves.
I agree that both of these impact the bottom line and I understand the business problems that are incurred when the cost of DOING business is higher, but the cost of fuel is not a hidden tax by the government. It is self inflicted by our inability to not go on a vacation this year or reluctance to change HOW we do something to use less fuel. We're comfortable with how we do things and are not putting the proper pressure on our government to create change. Some change is evolutionary and other change is revolutionary - we have chosen the slower route.
Keep up the great blogging. I had to point out this issue, but I like what you are doing here.