This is all fine and dandy. What do you think these gas prices are going to do to the economy? Taranto and others are already crying Saudi conspiracy to get Bush out of office. I'm inclined to agree with them. This could be a tough summer.

It really doesn't matter. We could all double our real incomes in the next two months and Democrats would still complain, probably about how we must have stole it from the brown peoples of the world. If the entire world doubled their earl incomes they'd complain that it isn't "sustainable". Reality never enters the picture.

Bush is smart to let the Dems rant on about the economy. The only thing that will matter is the status 60 days before the election and in. We'll be improving then, and the Dems will have an undeniable year-long record of fear mongering. A few commercials contrasting their dire predictions with reality and they'll be toast.

A fiver says this news will not lead any of the network newscasts tonight and it will not make the front page of the NYT...just a hunch...

I think most people are smart enough to realize that the President can do very little to affect the price of gasoline, aside from advocating for or against taxes on it. Kerry has already come out in favor of additional taxes on gasoine, so I doubt the Dems will get much mileage (no pun intended) on the gas issue. Plus, aren't these the same Saudis who are supposed to be bosom buddies with the House of Bush?

As for the economy in general, although we import a greater percentage of our oil than we did in the '70's, the economy is much less dependent on it, thanks to the tech boom. In addition, the OPEC cartel doesn't usually stay unified for long, and there are many oil-producing countries not in OPEC. So, quite a few countries are going to look at this as an opportunity to sell us oil, if the Saudis won't. Already we are seeing signs of this happening, the price of crude oil is coming down a little, and if it is a grand conspiracy to affect the election, the Saudis should have waited a few more months to do it.

I hope that the country looks at this as an opportunity to work a little harder on alternative fuel sources and conservation. I hope that we do not interfere with the emergency oil reserves or start drilling ANWR over this- to me, they're both emergency sources of oil.

chris, I'll take you up on that. Check out the nytimes.com frontpage.

Its great news.

Anybody else a bit puzzled that the unemployment rate which has been going down during months of dissapointing job growth decides now is the time to inch back up? Agh.. I understand the differences but its somewhat counterintuitive.

chris, pay up! Heh.

Max: ain't the internet wonderful? :)

After Kerry was nominated and started complaining about jobs, I came up with a formula that would be used to determine the margin of victory in the Presidential Election. This oh-so-scientific formula is based on the employment numbers.

For all things being equal, for every 150K jobs added to the economy between Feb and Nov above 650K, George Bush will recieve an additional 1% in the popular vote. So, if the economy adds 1 Mllion jobs between now and Nov, and there aren't any signifigant terrorist attacks in the US and Iraq is about as unstable as it is now, you can expect Bush to recieve an additional 2.3%
1M-650K=350K 350K/150k=2.3

Now I know what you are saying (shep and Ara this is for you) "SaWb we know you're brilliant and we would never doubt your incredible sense of the market, but what happens if we don't have job growth like that or that if we even have more job losses?"

How about this: If we have job growth more than 400K between now and Nov, but less than 650K then it won't have any effect on the popular vote. And for total job grow less than 400K total jobs, John Kerry will gain 2% for every 100k total jobs shy of 400K we get. For example, if between now and Nov, we only add 100,000 new jobs to the overall economny, John Kerry will gain 6% points.

If you're looking for science and data out of me, ummm, you're shoes are untied!

Max- I hear you on how the unemployment number is counter intuituve, but what is even more counter intuitive is when the market reacts badly to good employment numbers because of fears that a strong labor market will lead to interest rate increases!

Ralph,

Gas prices are only five cents higher than this time last year. Kerry's plan to simply goverment regs so there are fewer required formulations sounds like a good idea.

Max,

Unemployment rises when more people start looking for work.

Yours,
Wince

SAwB- your last comment reminds me of when I had to try to explain to my child the concept of the market "circuit breakers" (I know, the blind leading the blind, but he still thinks I might know something at times).

Anyway, he said, "So what you're saying is that this is to prevent grown-ups from jumping off a cliff just because all their friends are doing it, too."

Ouch!

As I understand it, the "labor pool" is the total of all those in work and all those looking. Whatever fraction those looking are to the total, that is the "unemployment rate". I've not been much exercised over the employment picture as I'm old enough to remember when 5% was (maybe it still is) considered the bedrock bottom desirable, as any smaller number is highly inflationary. Seems like we may now have a higher resistance to inflation so a lower number may be tolerable but it takes partisan amnesia to declare, as Hillary did to Franken the other day, that we are in Great Depression style dire straits. On the outsourcing issue, I don't see how it is one since overall unemployment is tickling the structural bottom and has been since before the Clinton years. How is a job "destroyed" or "created"? I guess when you can't find the job you want, it has been destroyed.

>>Gas prices are only five cents higher than this time last year.

Gas prices are up about 11 cents a gallon from last year. If you take into account the Saudis are cutting production, we can figure on an additional spike. They've held supply steady while demand is increasing. Now they are cutting supply and you can bet that prices are going to rise even further. We've no one to kick but ourselves as our lack of meaningful energy policy is going to come back to haunt us. We've only had three decades to solve this problem. What are we left with? A bunch of greenies running around the country trying to drive us into the dark ages. They've even come out against hydro and wind power. The fish and the birds you know. You know you've hit rock bottom as a country when you let radical freaks define crucial policies like energy development.

Remember, Wince, Ralph, gas prices don't go up (or down) in lock-step across the country.

I'm paying $2.09 for regular unleaded out here in Las Vegas which is, as I recall, a few cents more than I paid last year around this time - but I don't think that even $2.50 per gallon will be all that bad for the economy; I don't notice any less traffic on the roads.

Its a pretty straightfoward thing, ya know; lower taxes, higher investment leads to growth...this is not brain surgery and its been known for, oh, 200 years or so....perhaps longer because there was a Roman emperor who cut taxes for economically distressed areas....

Mark --

I'm paying $2.09 for regular unleaded out here in Las Vegas which is, as I recall, a few cents more than I paid last year around this time - but I don't think that even $2.50 per gallon will be all that bad for the economy; I don't notice any less traffic on the roads.

You keep talking like that and you'll end up in a Kerry ad, pushing the gas tax.

I'm just saying.

Max, Casey, don't start the Chevette just yet for your trip to Wal Mart...I said it had to lead on the network news AND be on the NYT front page...didn't say OR...

...what, did you think you were gonna get five dollars out of me that easy?

About unemployment. (At least from my perspective.)

Back in late 1981 I was near the end of the urban and regional planning mini-career I had prepared for by working for a master's degree in that field a few years earlier. That year I had reached the terminus of my job with a regional economic development and regional planning consortium which was in the process of dissolving. A few months later, a large-scale planning contract for a river basin commission for which I was also doing consulting work was completed, and that organization also ended when the federal government pulled its funding plug. Then one last assignment with FEMA, the Federal Emergency Management Agency, doing a small business relocation plan for a flood-prone part of an upper midwestern city, was completed. There I was, 47 years of age and I had no more work.

So out of raw necessity I purchased one of the first IBM-PCs that had been newly introduced that year, and I taught myself how to use it.

I had no way of knowing what kind of problems other people my age had teaching themselves how to program, use spreadsheets, word processing software, data communications software and hardware and much else that I had never heard of six months earlier. But I had myself and my family to support, with no choice but to learn this stuff damned quick and find a niche market for which I could provide services and make a living.

I made it work for my and I discovered the joys of running a small independent business. It works this way: You have a few, a dozen, a score, maybe a hundred customers. Each one of these is an employer of your services. But they don't know one another, and are not in contact with one another. So, consequently, they won't all fire you simultaneously. Especially if you try your best to provide them good and reliable service at reasonable cost.

That was 23 years ago and I'm still at it, with a couple of my kids working with me now. So you could say I grew my own job. My own way out of unemployment. Can everyone else do this? Why not? There was -- and is -- nothing exceptional about me. Not even the determination not be let myself get shoved against some wall by forces larger than me or my family.

So what do you do if there is nobody out there offering you a job? What if there is no more money in the unemployment compensation system? What if there is no vaunted social services net?

The answer is simple. You do one of three things. If you can, you stay where you are and try to find a job in some other field. Or you move away from where you are and try to find a job in your specific experience area, but in some other locality. Or, you try to create a job for yourself by offering your services in a market at large, by going into business. Are you guaranteed success in any of these paths? Of course not. But are you automatically doomed to failure no matter what you try? Equally unlikely.

A free market economy implies that you must assume responsibility for earning your own money, and that no government can do this for you if you want to keep your freedom along with your employment.

Arnold Harris
Mount Horeb WI

Ara,

Oh, not a chance - I can't recall the exact percentage, but I do think that about 40% or so of the price of a gallon of gasoline is the tax...now, I agree with gas taxes in that it makes entire sense to tax gas to pay for roads, but given that about half the gas tax money is used for things other than transportation, we could probably cut it in half with no ill effect on infrastructure...so, if we do that I'd be paying $1.71 for a gallon...