Gasoline Continues To Drop—Too Bad I'm Supposed To Stay Home

Cost Of Gas

I've been watching the news about oil prices and particularly gasoline for a few weeks now.

The lowest I remember seeing gas was $1.49 back during the George W. Bush presidency. I'm sure it's been lower than that in my lifetime, I've just not paid attention to it (or needed to) as I did then or now.

Today, while I was in town looking around (Oregon has a stay home, save lives statewide order in place, but I wanted to see what it looked like—to avoid a misdemeanor charge, I did get drive-thru), I saw gas at the local Safeway was down to $2.19 USD a gallon.

That made me wonder what it was at the gas station closer to where I live, so I went to take a look. Not quite as low, but at $2.25, still less than what it's been in years.

With the coronavirus making the rounds, the demand on oil and petroleum products has been falling as more and more people are required to shelter in place and if possible, work from home. Unnecessary travel, which is defined as pretty much anything other than work that can't be done at home, essential services, and going to get food, has basically been shut down.

I was wondering how low it might go. There are predictions that in some areas of the US it will get down to under $1.00 USD.

As you can see from the image above, there are about 52¢ of every gallon that goes to the state and feds in taxes. That means at $2.25 a gallon, the cost of just the gasoline itself is actually under $1.73 a gallon right now.

Lower prices at the pump is something most of us want, but in this case, it's just going to benefit the few who still commute to work, which isn't likely to be enough to keep the prices from falling even more. At some point, and I believe it's soon, the the price will end up below the cost of production.

That's not good.

But neither is this. Those of us who live within an hour of Portland along the I-5 corridor will be familiar with this place above—The outlet stores in Woodburn. It has one of the largest parking areas I've ever seen (it puts Costco to shame), and it's always packed, rain or shine, and sometimes it's even full in the overflow parking across the street.

As you can see, though, there's hardly anyone there. I took the image on my way back from a work stop in Hillsboro last week. What you see actually has the most cars in it. The rest of the parking was barren.

This is the inside of a bar I've been collecting money from for the last nine months. It has seven pool tables, by far the most of any one place I service. The four on the bottom floor generate anywhere from $100 to $150 each, every two weeks. That's between 532 and 800 games total. Now, they, and all the others in my route, are sitting idle, along with every other crane, video game, jukebox and ATM the company has.

Laid Off

As I posted elsewhere, I've been laid off from work. I've been aware it might be coming for days, but the first official notice came via text from the general manager. We had a decent chat about things. While he's still employed (for the time being) it's been hard laying off so many people. Even when he had his own pizza parlor and it failed, he didn't have to let go so many.

We don't often think about the manager or the owner doing the laying off, just ourselves when we're the employee. I know from my own experience when the newspapers I owned went out of business, it was the hardest, gut wrenching thing I've had to do. You feel a responsibility for those folks who have dedicated a good portion of their daily lives in helping the business grow and thrive. You wonder if they're going to be okay. You feel like you've let them down, even though it might not even be your fault. Not all businesses fail because of bad decisions or incompetence.

Since getting the text from the general manager, I also got the official layoff letter from the office manager in an e-mail. She's been very helpful in my time so far, and I wonder if she will still be working or not. She's a single parent with two older grade school aged kids. They do spend time with their Dad on a fairly regular basis, but there's been no school, and if the office manager isn't working, there's not another income I'm aware of to get by on.

That correspondence happened yesterday. Today in the early afternoon, I received a phone call from the owner of the business. He and his partner started it back in the early 1970s, and now it's just him. The company has survived recessions, the coming of home PC games, the advent of video game consoles, and who knows what else. Now all of the places it has machines are closed to the public, if not completely.

Historic Times

I doubt there are many who remember the last major pandemic, which according to what I read, was just over 100 years ago. The Spanish Flu, as it was dubbed, came on the heels of a World War. According to a post on the CDC site, it is estimated that roughly 500 million people, or a third of the world's population, came down with the H1N1 virus between 1918 to 1919. Deaths were at least 50 million, or 1 in 10.

For this new coronavirus to achieve the same percentages in infections and deaths, 2.5 billon people will have to get it, and 250 million people will have to die.

It's early yet. The cause of the virus is more or less traced to late last year, so it's only been three to four months at best. Still, a lot has changed in over 100 years, and the conditions that helped to spread the Spanish flu don't exist this time, even if our ability to travel, and thus spread the disease, is greatly enhanced.

Advances in medicine, health and hygiene, living conditions, sanitation disposal, the ability to manufacture supplies and transport them, along with communication, to highlight a few essential differences—will likely head off this virus far before it infects or claims so many. That's without the mandated measures in place by states and countries, which better help of why bother?

As of this writing, the number of confirmed cases (which will not include all those who may get it but who will never be tested for it), at under 418,000, with 18,605 deaths. Without knowing the actual numbers of infected, that places the death rate at 4.45% percent.

Can We Avoid Economic Death, Too?

As the U.S. Congress is ready to pass a $6 trillion stimulus package (when it did get that high?) tomorrow, I can only hope—against hope—that it will actually do any good, since every taxpaying individual and entity, along with their children, grandchildren and maybe great grandchildren—and probably 50 years of successors—will barely dig out from under this amount of massive borrowing.

Because that's essentially all it is. Borrowed money and borrowed time, that eventually comes due. Sooner than anyone is prepared for, I'm sure.

Of one thing I am certain. If there were ever time for decentralization and cryptocurrency, it is now.

Stay safe. Stay healthy.

_{Images courtesy of Glen Anthony Albrethsen}