In the first five minutes or so that I spent clicking through CNN.com, I found reason to spend this summer at home, indoors, in the dark, with a pantry full of Top Ramen noodles and glasses of tap water.
First, CNN tells us that it's going to cost us a lot more money if we go to the grocery store.
Food inflation is the highest in almost two decades, driven by record prices for oil, gas and mounting global demand for staples such as wheat and corn, and for proteins such as chicken. And that's reaching into Americans' backyards.
The price of an average barbecue -- with burgers, hot dogs, beer, soda, condiments, salad, paper plates and lighter fluid -- could run families about 6 percent more than last year.
The consumer price index for food rose 4 percent last year, compared with an average 2.5 percent annual rise for the last 15 years. On Monday, the U.S. Department of Agriculture raised its forecast for next year by half a percentage point, to a range of 4.5 to 5.5 percent.
Basic economics account for most of the increase: Bad weather has hurt crops, economic prosperity has driven up demand in developing countries, and surging fuel prices have raised transportation costs.
Economists and food scientists have argued that biofuel production is also a major factor in rising food costs, particularly corn, and that it should be scaled back. Meat and poultry executives have come out against federal ethanol mandates, which they say is driving the cost of corn higher.
Next, today's news brings word that crude oil has just shattered another record. What was it before Dubya was elected the first time, about $20 a barrel or so? I remember reading back then that if oil crossed $30 a barrel, there would be terrible consequences.
Today, however, oil crossed $133 a barrel, and CNN hasn't reported any response from the White House. One bright guy writing in today's Las Vegas Sun says it's the Democrats' fault, because Democrats have blocked efforts to drill in Alaska (where global warming has turned the potential drilling ground to slush and muck, but who's bothered by that?). The letter writer, Lee S. Gliddon Jr. of North Las Vegas -- a town renowned worldwide for conservation of energy and natural resources -- writes that the Bush administration bears no blame for these turns of events.
The Democrats continue their efforts to blame the rising prices of gasoline and fuel oil on the Republicans and, in particular, the Bush administration. There is no bigger lie to be foisted upon the American public.
Since 1980, almost 29 years ago, the Democrats began their refusal to allow offshore drilling, Alaskan oil drilling, the construction of nuclear power plants and wind farms off the coast of New England. Their claims, however foolish, were designed to protect the interests of their political contributors, not the pocketbooks of the American citizenry.
Now the Democrats want to blame the Republican Party for failure to levy fines for “price gouging” by Big Oil. Never mind the fact that they, the Democrats, ran on the promise to keep gasoline prices low and punish Big Oil for price gouging.
The Democrat spokesmen all say that if we were to allow drilling offshore, in Alaska, and that if we were to allow nuclear power plants, it would be at least 10 years before we would realize anything in production. That may be true, but if we had begun to act in 1980, 29 years ago, the “10 year” claim would be a moot point! We would have had energy prices under control, and facts are facts!
Even Forrest Gump had a little more rattling around than this fella, but Lee S. Gliddon Jr. has his admirers. Among the online responses to his screed: "Speak it, brother."
There will be blood, right? I think Lee S. Gliddon Jr. is drinking my milkshake.
Anyway, the hits just keep on comin':
NEW YORK (CNNMoney.com) -- Oil prices hit a fourth straight closing record Wednesday - shooting over $133 a barrel - after the government said crude and gasoline stockpiles decreased last week, surprising analysts who were expecting an increase. U.S. light crude for July delivery settled at $133.17 a barrel, up $4.19, on the New York Mercantile Exchange. Prior to the 10:30 a.m. ET report, oil was down 29 cents to $128.69.
Over the last four days, oil has gained more than $9 per barrel.
"There is a tremendous amount of fear and greed driving this market," said Stephen Schork, publisher of industry newsletter The Schork Report. "This is a runaway train. I don't think the fundamentals justify the runup."
Earlier Wednesday, oil prices soared past $130 a barrel for the first time amid continuing supply concerns and a weakening dollar. The contract retreated just before the government data were released.
"If you don't get a break in crude oil prices, you won't get a break at the pump," said Schork. "This is going to be a long, painful summer."
The price of a gallon of regular unleaded gasoline hit a record high for the 14th straight day, according to AAA's Web site. The nationwide average for a gallon of regular unleaded rose to $3.807, up from $3.80 the previous day and up 19% from year-ago levels.
The weakening dollar has also contributed to the rising cost of crude oil. Crude oil is traded in U.S. greenbacks across the globe, which means that a less valuable dollar sends the price of crude up.
I wonder if Dubya knows the average price of gas within a mile or so of the White House. I'd bet not. Buying gas is for the proles, not the kakistocracy. What has Dubya actually done about it?
Well, there was this trip to the court of King Fahd last week, in Riyadh, Saudi Arabia, where the supposed leader of the free world begged the tinhorn patriarch of a third-world dictatorship to turn up the oil spigots a little, just for old time's sake.
You know, if no oil flowed under the sands of Saudi Arabia, that entire nation might be just the world's largest landfill, with the nomadic Fahd family tending to the gates. But because there's oil, he gets all the Grecian formula he wants for his goatee, and he gets the occupant of America's White House begging him for favors. And, as we saw again, he gets to turn down that Boy King's pleas.
Or, from last week's New York Times,
Saudis Rebuff Bush, Politely, on Pumping More Oil
By SHERYL GAY STOLBERG and JAD MOUAWAD
RIYADH, Saudi Arabia — President Bush used a private visit to King Abdullah’s ranch here on Friday to make another appeal for an increase in oil production that might give American consumers some relief at the gasoline pump. The Saudis responded by announcing they had decided a week ago on a modest increase of 300,000 barrels a day.
The White House said the increase would not be enough to lower gasoline prices, which are nearing $4 a gallon, and industry analysts called it mostly symbolic.
But Mr. Bush’s request, his second in five months, coupled with rising anti-Saudi sentiment in the Democratic-led Congress, underscored the growing tensions between the countries over oil. The issue is also dominating the domestic agenda in Washington, where the Energy Department said Friday it was suspending shipments of oil to the strategic petroleum reserve.
Mr. Bush’s visit here was, in many respects, a reprise of a trip he made to the king’s ranch in January, when he asked for an increase in production and was rebuffed publicly by the oil minister and privately by the king. This time, the Saudis again resisted Mr. Bush, while offering at least the appearance of a concession.
The White House billed the visit on Friday as a way to celebrate 75 years of United States-Saudi relations...
In other words, the answer was, "No; hell, no; and stop coming over here begging us like a little girl for more oil. You want oil, you better ask someone who owes you something."
And the Bushes thought the Fahds were their friends. Guess this means no more canasta on Thursdays.
Do you ever wonder who's to blame, if not Dubya, for rising oil prices? Apparently Congress wonders it all the time. So, from time to time, it hauls up a menagerie of oil company executives to answer that very question in committee hearings. Funny thing is, Congress keeps getting the same answer: "It ain't us -- it's YOU. And by the way, don't stick your finger in the free market. (Greed is good. Long live Gordon Gekko!)"
The Senate Judiciary Committee called the hearing to explore the skyrocketing price of oil, which jumped over $4 a barrel to a new record of over $133. The committee grilled executives from Exxon Mobil, ConocoPhillips Co., Shell Oil Co., Chevron and BP as to how their companies can in good conscience make so much money, while American drivers pay so much at the pump.
"You have to sense what you're doing to us - we're on the precipice here, about to fall into recession," said Sen. Richard Durbin, D-Ill. "Does it trouble any one of you - the costs you're imposing on families, on small businesses, on truckers?"
The executives said it did, and that they are doing all they can to bring new oil supplies to market, but that the fundamental reasons for the surge in oil prices are largely out of their control.
"We cannot change the world market," said Robert Malone, chairman and president of BP America Inc. "Today's high prices are linked to the failure both here and abroad to increase supplies, renewables and conservation."
Malone's remarks were echoed by John Hofmeister, president of Shell. "The fundamental laws of supply and demand are at work," said Hofmeister.
The testimony was colored by a few outbursts of protest from members of the public. Before the hearing even began, a heckler in the crowd shouted: "Stop ripping off the American public - bring these oil prices down."
The panel took issue with the amount of money oil firms are investing in finding oil, and investing in renewables. "You know how much cash you have on hand compared to capital investment," said Durbin. "They are begging us for more refineries, for more exploration, when their refineries are only operating at 85 percent."
Chevron's Robertson said the issue wasn't really one of refining, and more just the price of crude. "We are investing all we can [in finding new oil] given the limitations of access and our own human capacity," he said. "We have adequate refined capacity, inventories are at an all time high. The issue is the price of crude."
The hearing marked the second time in as many months that top oil industry officials have been called before Congress. In April, roughly the same lineup defended their firms before a House committee. The hearing was ostensibly called to ask the executives why they needed some $18 billion in federal subsidies in light of their record profits, but quickly became a Q&A on bigger questions in the energy business.
So food prices are skyrocketing, energy prices are skyrocketing, the president of the United States travels all the way around the world to get emasculated by men dressed in flowing robes, and nothing is the fault of oil execs whose take-home pay, after bonuses, roughly the GDP of a small European nation.
Surely things this bad have to begin turning around soon, right?
Not that soon.
NEW YORK (CNNMoney.com) -- The Federal Reserve sees worse economic problems ahead, according to new forecasts from the central bank released Wednesday. The central bank said it now believes full-year economic growth will be between 0.3% and 1.2% this year, significantly below its previous forecast of 1.3% to 2% growth in January.
The Fed said in its minutes that members now expect the economy to shrink in the first half of the year -- the clearest signal yet that Federal Reserve chairman Ben Bernanke and other bankers believe the economy is in a recession.
The Fed also raised its unemployment forecast for the year to between 5.5% and 5.7%, up from its earlier estimate of 5.2% to 5.5%. The unemployment rate was 5% in April.
In addition, the Fed boosted its projection for inflation. It said it now expects personal consumption expenditures to rise between 3.1% and 3.4% in 2008, a full percentage point more than its earlier expectation. Even when soaring food and energy prices are stripped out, the Fed expects steeper "core" inflation than its previous estimate.
But while it said it expects the economy to recover a bit next year -- forecasts call for growth of 2% to 2.8% in 2009 -- the Fed still sees some weakness lingering into next year.
Anyone want the rest of the Top Ramen? I don't want them to go to waste.
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