Blog author: jballor
Wednesday, October 5, 2005
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Also from last week’s McLaughlin Group, Mort Zuckerman from U.S. News & World Report makes the important point that rising costs of gasoline greatly impact the poorest and most vulnerable populations.

MR. ZUCKERMAN: …It is very difficult in America to really cut back on gasoline consumption, because people go to work and go shopping in their cars. We do not have public transportation in the way that Europe does.

MR. MCLAUGHLIN: Well, we need that for the macroeconomy and the microeconomy.

MR. ZUCKERMAN: Yes, we do need — absolutely, because it is the sole means of transportation both to jobs, to schools and to entertainment. So it is —

MR. MCLAUGHLIN: Forget the means. I’m talking about consumption, consumption, consumption.

MR. ZUCKERMAN: I’m talking consumption, yes. But the other part of it is when gasoline prices go up, if they go up by 50 cents a gallon, people use 20 gallons a week. Okay, that’s $10 a week or $500 a year. And for a couple, that’s $1,000 a year. For the poor people or the people earning relatively…It really hurts a lot. So it really disproportionately hits the poor.

So while prices go up and the market adjusts and people will make decisions based on that, some of us don’t have all options to choose from that a large amount of disposable income allows. If you struggled before when gas was $1.50 a gallon to afford what it takes to commute to your job, imagine when that cost is doubled. Certainly there are still general possibilities for off-setting some of this burden (such as carpooling or relying on what public transportation there is), but especially the short-term effects when the costs of a commodity like gasoline rise as they have, as Zuckerman says, it “disproportionately hits the poor.”

So while on the broader economic level it is best to let the market work, at the same time churches, charities, and community groups should be acutely aware of this, and attempt to address these individual situations as best they can.