Price of Gas and Pork

 The price of gas is a poor indicator of how well a country's economy is performing. Think I'm wrong? Check out the gas prices in Venezuela. They can't give the stuff away.

In the USA gas, or petrol as it is called in the UK, has a checkered price history. When I was first buying the stuff in Kansas City, we often had what was affectionately known as a gas war. Gas got as low as 12 cents a gallon. Happy days! But, not to last. In those days I'm fairly sure the USA was self-sufficient in gas. Before OPEC, gas was plentiful, cheap and readily available. Furthermore gas prices have always been variable from state to state. California gas prices could make you cry?! Currently it's at 4.40 a gallon. It's 2.43 in KC. In the UK, a litre (4.4 liters per gallon) is £1.25 Making a gallon of gas about 5 bucks. What is clear is that the price of gas is a poor indicator of almost anything. Yet, it is a question which concerns the American public and folks in the UK I can assure you.

Gas is a function of the price of energy in general. Your packet of Oscar Meyer bacon has gas as a function of its retail price. The farmer who raises the pig, the slaughterhouse which processes the meat, the factory that slices and packs the meat in a carbon-based container, the bacon curing process, the advertising budget of Oscar Meyer, the consumer's trip to the store to buy the bacon all are components that decide the price of Bacon. Fixing the actual reason for the recent rise in bacon prices to the mast of a particular policy or politician is whilst very probably self-satisfying to some folks and an anathema to others overall not very sane, relevant or important.

Clearly, for a variety of reasons, some good, some possibly spurious, food and gas prices are only going in one direction. This is likely to continue regardless of who is in office.

American consumers need to wake up and smell the coffee. In the UK coffee it's between 9 and 14 £ per kilo (2.2 pounds) in the USA it's about 8.50 dollars a pound- that makes it about 3 bucks more expensive in the US. Your Starbucks is going to get more expensive. Inevitable. If you are a big coffee drinker, I suggest you switch to tea!

Both the US and UK have been cheerfully living high-on-the-hog (pardon the pun)by effectively ripping off the commodity producing nations. They used to do it very nicely with gas until the advent of OPEC and the demise of Texas gold. With pork, the Chinese consumer is now mopping up any cheap pork and the US consumer is paying the price. As more Chinese eat bacon and pork, the cost to the US or UK consumer is going to go up.  It’s Economics 101.

As a result of the Biden administration's conversion to a greener energy policy, the consumer is going to continue to pick up most of the tab for the energy component of the rise in commodity prices.

BTW (an aside) A US lab today reported that they are on the verge of the Holy Grail, commercially viable nuclear fusion which will make arguments about the price of almost everything redundant. Unfortunately, this may well not happen until beyond our life-time.  Our grand or great, great grand-kids may well look back on this and wonder what all the fuss was about!

Until fusion comes on-stream the price of energy will continue to sky-rocket and we (the consumer) will bear the brunt of any price rises.  This will be true no matter where you live.  The idea that the U.S. can insulate itself from the global economy is a pipe-dream.  This was at the core one of the policies of Donald Trump.  MAGA - make America Great Again - presumes that somehow America  stopped being great at some time.  It plays to the same audience as Charles Lindberg’s tribal appeal called America First before WWII.

When the New York Times interviewed Donald Trump in March 2016, one of the reporters, David Sanger, suggested that Trump’s foreign policy could be summed up as “America First”—“a mistrust of many foreigners, both our adversaries and some of our allies, a sense that they’ve been freeloading off of us for many years.”  

“Correct. O.K.? That’s fine,” Trump responded. Sanger pressed him to be sure. “I’ll tell you—you’re getting close,” Trump said, in his typically staccato style. “Not isolationist, I’m not isolationist, but I am ‘America First.’ So, I like the expression. I’m ‘America First.’ ”

This is one factor is driving the US consumer into fits of apoplectic rage. Even with sleepy Joe onboard the focus is on the consumer and their perception of the meaning of America First in consumer affairs.. What Donald and Joe forget to tell the electorate is that at the bottom line politicians of whatever persuasion can be powerless to affect the price of either gas or bacon. They can, of course, and often do tinker around the edges by tweaking the tax or import duties on particular products. This may assuage the public for a bit and effectively kick any real decision down the road, but, and this should come as no surprise, all politicians do this all the time. After all, why take a potentially awkward decision or even worse a potentially vote-losing one when you can effectively b***s*** the public and do nothing at all.

Addendum

The withdrawal from Afghanistan has been overshadowing everything else in the news.  Neither Trump, Biden or Boris come out looking particularly well.  Joe Biden has taken a pasting, and rightly so.  People wanted out of Afghanistan, but thought that the folks organising it might have put a bit of thought and effort into it.  The UK media are blaming Joe for not seeing the demise of the Afghan army as a real possibility.  They are probably right.