Steadily rising gas prices have become a cold, hard reality for the American people. But according to one highly-placed with close connections to the gas and oil industries, things may be about to get much worse.
In a recent television interview, the former president of Shell Oil, John Hofmeister, stated his belief that gas prices will reach the astonishing price of $5 a gallon by as soon as 2012. Another analyst, Tom Kloza of the Oil Price Information Service, agrees that prices will eventually hit the $5 mark, although he forecasts a somewhat longer time frame.
Regardless of when the $5 level is breached, the important point is that the tremendous financial squeeze American families are feeling is destined to continue for some time. Skyrocketing gas prices hit the American pocketbook in more ways than the obvious, as higher fuel prices mean higher transportation costs for food and other essential resources Those costs are then passed on up the supply chain by wholesalers and retailers until they reach the consumers – us, in other words.
It is important to note that while the economy has been struggling, weighted down by persistently high levels of unemployment and personal debt, the oil companies have been doing better than ever before. Exxon Mobil, for example, earned an all-time high of $45.2 billion in profits in 2009, during the height of this recession. Since Exxon Mobil actually lost money on the production side, it is clear that the main source of their profits has been coming from the prices they are charging at the gas pump.
In combination with higher costs for food and other necessities, this brings up a critical point that must be acknowledged if we are truly going understand the depths of the plight we are currently facing. The powerful multinational corporations who control our supplies of energy, food, and other essential goods are determined most of all to maintain – or possibly even increase – their current levels of profit no matter what happens to the economy as a whole. This is why the American economy has been allowed to become dependent on unsustainable debt. The puppet masters in business, government and finance who control our nation’s purse strings will do whatever they must to guarantee that enough credit is available to keep profits flowing into their own coffers. When the final bill comes due, you will be the ones expected to pay, and if you cannot, they will seize your homes and resources without a second thought.
The problem is that as more and more of the economic burden is being passed on to working men and women through the toxic combination of higher prices and higher levels of debt, the underlying foundations of our economy are being put at grave risk. More money spent on crucial goods like gasoline means less money available to spend on other things; but consumer spending must expand, not contract, in order for our economy to grow its way out of recession. Instead of growth, we are creating a situation conducive to economic contraction, and the only possible endpoint for an economy shrinking in this way is an eventual collapse into depression. Most of alive today only know of our last Great Depression through the history books. But the situation then was truly grim: 20% unemployment, millions of farmers displaced from their lands, mass starvation, crime and suicides rates soaring to all-time highs – the level of suffering associated with economic depression is truly immense and almost unimaginable.
Americans in 1929 were ill-prepared for a sudden calamity. Today, however, we are all informed and sophisticated enough to see the signs of what is happening, and there is no excuse not to be prepared for the inevitable collapse. Perhaps our policy makers will see the light, and steps will be taken to protect the American people and prevent what is about to occur from taking place. In light of the incestuous relationships between government, big business, and big finance, however, this seems like a dim hope at best. Therefore, it is up to us, individually and collectively, to do what is necessary to prepare ourselves and our loved ones for the challenging, difficult times that are facing us all in the years ahead.