$124. That’s the price of a barrel of oil today.
In 2004 we gasped when the price of oil hit $50 a barrel, then considered to be a great psychological barrier. In summer 2007 we coped with $3-a-gallon gasoline as oil prices continued their erratic march upward. Now, on the cusp of summer 2008, the $4-a-gallon price of gasoline is reality, and some predictions point to even higher as the price of crude oil continues its inexorable march; some predictions point to $200 a barrel soon.
Economists point to many reasons for oil’s volatile price rises — huge new demand from China, the War in Iraq, the weak dollar, the insatiable American consumer…. but that latter beast may well be hitting the wall. Sales of small cars and hybrids are well up, while the SUV crashes like a dinosaur in the proverbial tar pit.
The global economic crisis is fueled in part by this volatility in the price of oil and the consequent pressure those prices put on food and other essential goods. Few commercial products or businesses are unscathed by the rapidly-rising price of oil. Supply chains depend on long-distance transportation to keep goods on store shelves, and modern machinery drinks oil for everything from farm tractors to the electrical sources needed to power our computers. More costly delivery systems mean higher prices, just at a time when many consumers have also suffered the rapid decline in their most important asset — the value of their homes. Some are even suffering foreclosure thanks to the subprime mortgage mess.
Meanwhile, oil companies and their executives have enjoyed record profits. Go figure. Well, it’s not that hard to figure, actually, given the price of oil produced by these companies.
Democrats in the House and Senate have proposed imposing a windfall profits tax on oil companies, but that’s unlikely to get President Bush’s signature. The presidential candidates have floated various proposals to give consumers some relief, but frankly, I’m having a hard time finding any real economic leadership among any of the candidates.
I’m also having a hard time understanding why consumers are just taking it all in relative stride — going to the gas station these days seems like the closest I may ever get to a slot machine. Just keep pumping those quarters in (or $20 bills, or credit cards) in the futile hope of winning the jackpot or filling the tank for less than the price of a pair of good shoes (at least my version of shoes). Yes, we can change our habits to be more environmentally responsible (a hybrid may well be the only responsible next car… I’m doing my research right now as my odometer is cresting at 125,000 miles…) — but the politics of the current economic catastrophe demands consideration as a separate matter. While great public good may well come because people will have to change their habits to cope with the price of gasoline, that does not excuse the political manipulation and appalling greed that created this mess. Where’s the outrage?
Trinity is certainly not immune from the consequences of the current economic situation — the undeclared recession or whatever we want to call it. The costs of food and fuel and supplies here are certainly going up, and our students, faculty and staff all find their costs increasing as well. But beyond the pain we may feel as personal and institutional consumers, as a university with a mission rooted in social justice we should be doing more to examine and discuss these issues publicly, challenging the conventional wisdom and developing proposals for effective solutions.
Commencement is upon us, but learning does not stop. As we plan for the new academic year, let’s include exploration, discussion and public analysis on the grave economic issues of this moment, particularly the looming social problems that will grow increasingly serious if the price of oil continues to spin out of control.