Stefanella's Drive Thru

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America-nomics July 10, 2008

My friend Liza returned to Israel from a U.S. visit this Spring talking about rising gas prices and Americans feeling the crunch.

Gas stations that can’t compete are going out of business. Lines of drivers wait to fill up at stations offering a few cents off the rate the guy a block away puts up.

One time we saw a bunch of cars making U-Turns into a station where the price was remarkably lower than the going rate. We followed because who doesn’t want in on a good deal? It was a real life “too good to be true” scenario: The station was shut down but the owners hadn’t covered the pumps or taken down the last posted price.

Visiting my parents in rural Cincinnati this summer, I am coming face to face with Liza’s description. It’s one thing to read about record high $145 per barrel oil prices and quite another to see the effects.

I could reason that my mother’s precautionary strategizing – “You’ll need to plan out what you do and where you go while you’re here; gas is expensive” – is tied to her fixed budget status.

But she’s been a retiree for several years. This is the first summer she has prodded for mindfulness over the odometer reading or fuel tank fill-ups.

And it’s not just my mom. I asked my brother Josh for his Infiniti keys so I could make a dash to the local produce farm 10 miles down the road. He handed me the keys to his girlfriend’s Honda Accord instead. “Take the other one,” he offered. “Mine inhales gas.”

My sister, prior to offering up her compact model SUV for an outing, queried: “How far away is your meeting?”

I filled the tank of my mother’s Toyota yesterday. Kroger’s post-July 4th basement bargain rate of $3.86 per gallon put me out by $50 for the tank, already a quarter full before I started pumping. Last summer’s tank fill-up ran at about $35.

Prices are relative, of course. Where I come from, petrol rings in at an alarming three times the going rate in Ohio. Green-promoting, Jerusalem-based Benchmark Capital partner Michael Eisenberg takes Israel’s government to task for not rising to the occasion.

I filled up my tank the other day on my Volvo S40. Over 400 NIS. With the weakening dollar that is about $120! Gasoline here is now $8.50 per gallon . . .and is showing no signs of stopping.

With that as a backdrop, Prime Minister Olmert’s decision to stop building the high speed rail link between Jerusalem and Tel Aviv (link in Hebrew) is worse than bewildering. It is downright dangerous.

Given the neighborhood we live in, we should be doing everything possible to reduce oil dependency in Israel.

Maybe the PM’s busy with Iran’s testing. But hang on to your rail passes because if per-barrel prices really do end up rising from the current $137 to $170 by summer’s end as forecast by OPEC president Chakib Khelil last week, it’s going to get tighter still.

Israelis may be price-gouged but they haven’t yet been hit with the doldrums of job slumping, property foreclosing recession.

Which is also in your face here in middle America.

“For Sale” signs rusty from over-exposure pepper front lawns, the local evening news routinely carries stories of families in despair and Oprah is hosting guests lamenting their loss of fortune during the current economic downturn.

Americans are all sticking closer to home these days – air travel’s down and Amtrak Rails is setting records for the first time in years.

During chance meetings last week, three different people voiced deep concern over job safety and finances.

Some days I want to scream at the salaried employees: ‘FOR GOD’S SAKE YOU GET A PAYCHECK. SHUT UP AND SAY THANK YOU!'”, Sales rep Barb** told me, worry lines furrowing her brow. It was evening but she had forgotten to remove the first financial bank pin from her blouse. “I didn’t take a salary this month. And I don’t know what’s gonna happen next month. But I guess I should be thankful for not having a mortgage I can’t pay. I’m scared.

And there was George, a middle management plastics industry professional who told me all he wants is to retire with his company. But recent cuts are rattling his nerves. There’s no job security, even with twenty years’ seniority.

Frightening stuff when viewed up close.

And if, after all the proof I still doubted America’s tough times, the niggling was quelled last week when I heard NPR’s report that Starbuck‘s is planning to shut down 600 stores.

Ach, who wants to waste the gas driving there anyhow?


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