What GOP operative wrote this Gannett News Service piece that the Tucson Citizen saw fit to pass on to the rest of us?

Gas prices' impact 'fairly limited' --Gannett News Service

WASHINGTON - Drivers may be griping about record high gasoline costs, but the recent surge in the price at the pump will have little impact on most consumers and will be hardly noticed in the broad economy, say several economists, including those at Standard & Poor's, LaSalle Bank and the Federal Reserve Bank of Dallas.

Rising incomes will help offset higher gas prices for most Americans, they say. And although gas prices are at unprecedented levels, not adjusted for inflation, the price gains have come over a number of years, giving consumers time to adjust their budgets.

"It's going to slow things down . . . but luckily, consumers' pocketbooks are doing reasonably well," Standard & Poor's chief economist David Wyss says. "Some people are going to get hurt by this. But the overall impact on the economy is going to be fairly limited."

Low-income households that are already stretched thin are likely struggling to pay their higher gasoline bills, Wyss says.

The nationwide average price of a gallon of regular gasoline was $3.209 on Tuesday, up more than a penny from Monday and 32 cents higher than a year ago, according to motor club AAA.

The average price at the pump is approaching the all-time high even when adjusting for inflation. The inflation-adjusted record was set in March 1981 at $3.223 in today's dollars, according to the Energy Department.

Prices are now above $3 a gallon on average in every state except New Jersey, where the statewide average was $2.95 on Tuesday. The highest price was in Illinois, where it was $3.48 a gallon Tuesday, AAA said.

Retail gasoline prices will likely continue to increase, based on prices in wholesale markets, says Guy Caruso, administrator of the Energy Information Administration, the statistical arm of the Energy Department.

"Our models indicate that there is still some pass-through that has not reached the retail level," Caruso said Tuesday during a House Energy and Commerce subcommittee hearing.

Although gasoline prices have been increasing, incomes have also been rising at a steady pace, as a low unemployment rate has helped push up pay.

Wages and salaries for workers in private industry were up 3.6 percent in March from a year earlier, after a 2.4 percent gain in March 2006, according to the Labor Department.

Offsetting pain at pump

Lehman Bros. chief U.S. economist Ethan Harris expects the job market to remain strong and for wage gains to continue.

"It offsets some of the pain at the pump," he says. Harris expects higher gasoline prices will act as a small drag on consumer spending growth in 2007.

But consumer spending will still grow, he says.

Although higher gasoline prices are adding up, "it's still not enough to take down the consumer," Mesirow Financial chief economist Diane Swonk says.

But some economists are concerned gasoline could spell trouble for the economy.

"We may have been here before . . . but in those instances, increased home prices provided "an offsetting wealth boost," he said. With the housing market in a slump, consumers will not see such an offset in 2007.

Plus, Rosenberg notes the higher gasoline costs have come at a time when prices for food, another staple, are also rising.

Consumers' spending on gasoline accounted for 3.2 percent of disposable income in March, the latest data available, according to Moody's Economy.com.

That was an increase from February, but still lower than the percentage seen when gas prices shot up after hurricanes Katrina and Rita.

Rate of price rise key

When analyzing the impact on the economy, it's important to look at the pace of change in price, not the level of the price, Stephen Brown, director of energy economics at the Dallas Fed, says.

That's because over time, consumers and businesses adjust to higher prices. It's the sudden jumps that cause problems.

Brown notes that average retail gasoline prices in 2006 were up 30 cents from 2005. This year, the average price is expected to be up between 10 and 15 cents, he says.

"It may not seem gradual, but if we look at the oil price spikes of the '70s and '80s, it was almost overnight," he says.

"People are more accepting now of $3 gas than they were before," A.C. Moore Arts & Crafts President Larry Fine said in a conference call with investors earlier this month, according to Thomson Financial. "I don't think it has the shock value it did to people."

Says Linda Rowell, 47, of Falls Church, Va., when paying $3.11 a gallon to fill up her minivan Tuesday afternoon: "That's just something you have to live with."

Brown estimates higher prices for all forms of energy, not just gasoline, shaved about half a percentage point from economic growth each year in the past few years. This year, the impact will be even smaller, and in 2008, energy prices will have no noticeable impact on the economy, he predicts.

"We're toward the tail-end of the adjustment," Brown says.

There's no doubt that higher gasoline prices are having a significant impact on lower-income consumers and the businesses they frequent.

Wal-Mart CEO Lee Scott last week told investors that gasoline prices were one of the top three concerns for discount store shoppers after income and other costs, according to Thomson Financial. Officials at Steak 'n Shake and Burger King franchisee Carrols Restaurant Group also expressed concern about rising gasoline prices in investor calls this month.

David Le, 20, a full-time student from Fairfax, Va., who works three part-time jobs, says the current gas price is stretching his already tight budget.

"It's ridiculously high," he says while pumping gas in Falls Church. "I don't get paid enough."

......

So gas prices are going up; food prices are going up. But not to worry, those people who matter are getting raises beyond their needs and those people who are not doing well are already in trouble so they do not matter in our 'money=success' culture.

Corporations are making sure they cash in which ever way the economy goes so by definition the economy is right on track. End of thesis.

Now go shopping with all that extra money you've been hording after you pay for your car and your mortgage and save money for your kids education and pay for you 'health' insurance and ...

Corporate America is depending on you.