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Daily News Editorial

By Staff | Jul 23, 2008

Not that it’s any great consolation, but gas prices seem to have backed off slightly from their highs earlier this month when tensions over Iran fueled a spike in the petroleum market.

Locally, consumers locally saw prices slip about a dime, giving a slight breather in the all-time record price for gas.

Still, across the country, people are deciding to stay home, or at least downsize their vacation plans, in lieu of spending thousands of dollars to take family vacations that a year or so cost half as much. The American vacation, as hallowed of a national dream as owning your own home or having two cars in every garage, something that nearly everyone in the country has come to believe is a well-earned right, has now become an option. With gas prices still unbearably high, people are staying home.

One benefit is that traffic deaths are down drastically, as much as 20 percent in some states. With fewer people spending time on the road, there are naturally fewer accidents and hence fewer traffic fatalities.

While international concerns regarding Iran still play a factor in gas prices, the market also seems to be responding to reduced consumer demand for gas.

Another sign of reduced gas use is a move away from SUVs toward more fuel-efficient cars. That, too, should reduce or at least halt the continued spike in gas prices.

While Federal Reserve Chair Ben Bernanke has intimated that an interest rate hike could be soon in the future if inflation continues its present course, such an action should not be taken without looking at all aspects of the economy. Our present course of inflation is in large part being caused by inflated fuel prices. To punish consumers for something that’s out of their control makes no sense. Increasing interest rates on top of the current rate of inflation will squeeze middle-income wage earners from both ends.

While some may argue that the Fed should raise interest rates so investors get more from their savings, a good, hard look needs to be taken of the overall economy before any measures are taken.

Perhaps more oversight of petroleum futures trading, including tightened daily trading limits, would be a preferable alternative. Since that seems to be the area from which our current economic woes originate, then that is the area where federal monetary policymakers should focus their concerns.

It’s worth a try, at least.