Do economic signs read 'end is near'?
Wednesday, July 12, 2006
When lean times hit, they hit hard.
In the past few weeks I've been writing and reading about some economic indicators. Almost all of them seem to be flashing red warning signs.
Most noticeable, of course, is the cost of gasoline, which is headed toward $3 per gallon in Southeast Missouri. A weekend drive to St. Louis and back now costs a cool $20 for a small car or, I'm guessing, $50 in your standard H-2 Hummer.
Either way, we're inching into the zone where a $65 flight from Cape to Lambert Field will be cheaper than hitting the roadways.
And it's not just the tank that's guzzling our greenbacks. There's also asphalt to contend with.
Prices of liquid asphalt are rising at meteoric rates, about $25 per ton every month, say local manufacturers. Even the powerful MoDOT laments that its Smooth Roads Initiative would have been $100 million over budget if restarted at today's costs.
These rising prices have towns across the country tightening belts and scaling back summer resurfacing projects.
So if you live on a less-traveled county road, please accept my condolences. The steamrollers won't be paving your road for awhile; might as well get used to that taste of dust in your morning cornflakes.
But that's not the end of the story. It's also getting costlier just to keep the lights on.
Last week Ameren UE announced it will seek to increase electricity bills by an average of 17 percent across Missouri. Yes, we know, this is the first rate increase in 20 years, but you can't blame people for getting worked up.
Business owners say they'll have no choice but to pass the hike on to consumers and one local manufacturer said his monthly electric bill could jump by as much as $240,000 if the changes go through.
Ameren counters the complaints by saying rising coal and transportation prices have their hands tied.
None of this helps area dads who may be forced to start deducting utilities from little Billy's allowance if he can't learn to "just turn off the darned lights."
So there you have it. Your gas, your blacktop and your lights are getting dearer by the day.
But what are people doing in these times of financial insecurity? They're buying gold, of course. The St. Louis Post Dispatch recently reported that investors are pouring loads of money into the gold market. The precious metal is earning its highest price since the stock market crash of 1987. And that's no coincidence.
"There's simply no reason to buy it except to bet on disaster," said gold historian Peter Bernstein in Sunday's Post Dispatch. "The people who buy gold are simply the people who have no faith in paper currencies."
Oh boy, that's not good.
So is the crisis of faith warranted? One group says yes. The Department of Labor's consumer price index, the best indicator of inflation, rose 4.2 percent in May. If it stays on course we'll have the highest annual inflation in more than 10 years and you may have to start bartering for that gallon of milk at the grocery store.
OK, OK, but it can't all be doom and gloom right? At least wages must be rising.
Ahhm, not so fast. At least not for all of us. The Washington Post just reported this on wages in our nation's capital: "From 2003 to 2005, the average wage for people in the lowest pay bracket, with salaries around $20,000, rose only 5.4 percent in the Washington region -- not enough to keep up with rising prices. For the jobs that pay around $60,000, salaries rose 12.4 percent." Hmmm.
Well, at least we have our health.
TJ Greaney is a staff reporter for the Southeast Missourian.