Green Shoots Doused?

The Obama Administration is touting "green shoots," their language for signs on progress the economy is turning around. Small pieces of data, they say, indicate that their stimulus package is beginning to work. One such data point is the unemployment rate which was announced last week. While 9.5% is the highest in over 20 years, the Administration asserts that the rate of increase in unemployment is slowing down. I feel better already.

But really, the economy is still reeling and the slightest hiccup can cause problems. Over the past few weeks gas prices have soared. The price of a barrel of oil has risen even more and for the first time in a long long time, gas prices have not even kept up with the price of oil. Increasing oil prices are frequently a sign that the economy is growing. Most oil traders subscribe to the notions of supply and demand. If the economy is growing, demand for oil increases and given the oil cartels and, well, er, greed of the big oil companies, supply is often limited. When the Obama Administration announces there are green shoots, in other words, hope for the economy, oil traders boost the price of oil and gas prices soar.

But here is the problem. Over 9.5% of Americans are unemployed. In most places it takes a car to look for work. Go to the unemployment office, to job interviews scattered throughout the area, pick up kids from school, network with employed parents on the sidelines of the soccer game, you get the idea. If the cost of gas increases, as it has, then something on a fix income has to go. Green shoots wither.

And of course, there are the transportation wonks who advocate increasing federal gas taxes so people can not afford to drive (one of these days I will talk about all my environmental colleagues who owned large cars and drove to work, every day).

I don't envy the economists and budget gurus advising President Obama. This is a delicate and tough time. Hopefully, however, they are paying attention to the little things that can send families over the edge. Gas prices are certainly one of them.