Economic Stress Filtering Down To Grass Roots Levels

By James Donahue

Three stories in the news this week jumped out at us as strong indicators that the rising cost of fuel and sluggish economy caused mostly by careless government war spending is already hitting America hard where it really hurts . . . in the pocketbook.

Truckers, many of them now talking to each other on line instead of CB radios, complain that they are going broke because the cost of fuel is eating up their profits. Cattle hauler Dan Little of Carrollton, Missouri, says he and at least 1,000 other truckers from across the United States are committed to parking their rigs and going on strike for better wages on April 1.

The word of the truck strike is spreading like wildfire and most other truck drivers, interviewed at random, say they plan to join the strike even though they have not committed themselves on line.

A strike like this could spread from shore to shore. And if it happens, and the truckers keep their rigs parked for at least a week, they could quickly paralyze everything. Produce will not get delivered, grocery store shelves will go bare, gas tanks will be going dry with no place to get more, and the nation’s commerce could be brought to a sudden and costly halt.

There are numerous issues hitting the trucking industry just now. Not only has the cost of diesel fuel hit the $4 a gallon level in about 17 states, but the average truck owner/operator is paying from $600 to $800 a month for truck insurance. The cost of insurance, they say, is based on personal credit, and truckers are getting a bad credit rating these days.

The truckers say they don’t expect oil companies to lower the price of fuel when they strike, but they want state and federal governments to give them a break on fuel taxes and insurance companies to ease back on the cost of insuring their rigs.

As one trucker put it, his rig is paid for, and he still loses money every time he starts his engine. He says he just wants to get back to making a profit instead of subsidizing the businesses that depend on his truck to deliver their goods to market.

As consumers, we all know where this is going to lead. If we have a trucker strike, we will be short of food, gasoline, building supplies, medical supplies and just about everything else we have learned to expect when we run to the local market. Once it is settled, the price of everything we buy is going to go through the roof.

We have all heard about the housing crisis, but here is a troublesome statistic from Michigan. It seems that the percent of non-rental homes sitting vacant and on the market has taken a big jump.

In all, 3.8 percent of owner-occupied homes in the state are vacant and up for sale, compared to 2.7 percent nationwide. In Detroit, the rate is 4.1 percent. “For Sale” signs are seen everywhere and there are few if any buyers. That is because jobs are drying up and many of the home owners are victims of that sub-prime loan scam and cannot keep up with their rising mortgage payments.

The housing mess has all of the earmarks of the Great Depression days, when people were losing their homes all over the nation, and for similar reasons. And like the 1920s, we notice when we watch the house listings, when homeowners get desperate and offer their homes on the market for extremely reduced rates . . . like $25,000 instead of $100,000 the way it used to be . . . the property is quickly getting snapped up. We believe realtors or other people with cash to invest, are investing their money in property as a hedge against a now unstable stock market.

The third issue is found in Ohio, where a record 1.1 million people are now signed up for food stamps. That amounts to about 10 percent of the population of the state. Statistics show that case loads have almost doubled since 2001, and economic conditions are so bad in Ohio just now, that another 500,000 residents may be eligible for food stamps. The unemployment rate in Ohio has hit 5.3 percent. And that number only includes the people signed up for unemployment benefits. Many others have been out of work so long their names have fallen off the rolls.