[Looking Beyond the Headlines at Gas, Insurance, Groceries, and the World Around Us]
When gasoline, groceries, electricity, and insurance become more expensive, it is natural for people to ask:
“Who is responsible for all of this?”
Very often, whichever political party occupies the White House, receives the blame when prices rise and the credit when prices fall. Government leadership and public policy certainly matter, but the truth is more complicated.
Many of the prices we pay are affected by forces stretching far beyond Washington, D.C.
THE PRESIDENT DOES NOT SET THE PRICE AT THE PUMP
No American president personally determines the price of gasoline.
Government policies involving domestic energy production, taxes, regulations, sanctions, trade, and foreign affairs can influence energy prices. But gasoline prices are also affected by the worldwide price of crude oil, refinery capacity, supply and demand, transportation costs, seasonal fuel requirements, natural disasters, wars, and international instability.
That is especially important when trouble develops in the Middle East.
WHY IRAN AND THE STRAIT OF HORMUZ MATTER
One of the most important waterways in the world’s energy system is the Strait of Hormuz, the narrow passage between Iran and Oman.
A tremendous amount of the world’s oil and petroleum products normally travels through this region.
When conflict threatens shipping through the Strait, several things can happen:
Conflict or uncertainty in the Middle East
↓
Oil supplies and shipping are threatened
↓
Crude oil and transportation costs can rise
↓
Refining and fuel costs increase
↓
Gasoline and diesel become more expensive
↓
Trucking, farming, manufacturing, and delivery cost more
↓
Some of those costs eventually reach consumers
That means something happening thousands of miles from our homes can eventually affect what we pay here in America.
WHY DOES A PROBLEM WITH OIL AFFECT GROCERIES?
Think about everything required to put a gallon of milk or a loaf of bread on a store shelf.
Farm equipment requires fuel. Food must be processed. Refrigeration requires energy. Packaging must be manufactured. Trucks must transport products to warehouses and stores.
When energy and transportation become more expensive, businesses eventually have to absorb those costs or pass some of them along to consumers.
This does not mean every price increase is caused by oil. It means our economy is interconnected.
WHY HAS INSURANCE BECOME SO EXPENSIVE?
Insurance is another issue that cannot simply be blamed on one president.
Homeowners insurance can be affected by the rising cost of lumber, roofing, construction materials, labor, severe storms, hurricanes, fires, property values, rebuilding expenses, and the increasing cost of large insurance claims.
Automobile insurance has faced similar pressures.
Today’s vehicles contain cameras, computers, radar sensors, electronic safety systems, and expensive components. A collision that once required replacing a simple bumper may now involve replacing and recalibrating sophisticated equipment.
When the average insurance claim becomes more expensive, insurance companies frequently respond by increasing premiums.
DOES GOVERNMENT POLICY MATTER?
Yes.
Presidential administrations and Congress can influence economic conditions through spending, taxation, tariffs, regulations, energy policy, sanctions, trade agreements, and foreign policy.
The Federal Reserve also has enormous influence through interest rates and monetary policy.
But no president—Republican or Democrat—controls every part of the American economy or the worldwide marketplace.
We should therefore be careful about reducing a complicated economic problem to:
“Everything is expensive because of one person.”
Sometimes government policy contributes to the problem. Sometimes international events contribute. Sometimes shortages, natural disasters, business decisions, monetary policy, supply chains, or consumer demand contribute.
Usually, several of these forces are working at the same time.
LOWER INFLATION DOES NOT NECESSARILY MEAN LOWER PRICES
This is one of the most misunderstood parts of the discussion.
Suppose something costs:
Year One — $100
Year Two — $110
Year Three — $115
The rate at which the price is increasing has slowed considerably—but the item still costs $15 more than it originally did.
Therefore, when we hear that “inflation is coming down,” that usually means prices are increasing more slowly.
It does not necessarily mean prices have returned to where they were several years ago.
That helps explain why economic reports can say inflation is improving while families still feel tremendous pressure at the grocery store, gas pump, or when an insurance bill arrives.
HOW SHOULD CHRISTIANS RESPOND?
Our purpose as a church is not to tell people which political party to support.
Our responsibility is to encourage people to seek truth, wisdom, discernment, and ultimately confidence in God.
The Bible says:
“The simple believeth every word: but the prudent man looketh well to his going.” — Proverbs 14:15 KJV
We should investigate before repeating something simply because we heard it on television, social media, or from a politician we like.
We should also remember:
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” — Proverbs 22:3 KJV
Christians should be informed about what is happening in the world without becoming consumed by fear.
Governments change.
Markets rise and fall.
Oil prices rise and fall.
Presidents come and go.
Nations rise and decline.
But our ultimate security has never rested in Washington, Wall Street, or the Middle East.
David wrote:
“Some trust in chariots, and some in horses: but we will remember the name of the LORD our God.” — Psalm 20:7 KJV
We should pray for our leaders. We should vote according to our convictions. We should hold leaders accountable. We should manage our money wisely. We should help families who are struggling.
But above everything else, we should remember Who is ultimately in control.
The headlines may change tomorrow.
God will not.
“Jesus Christ the same yesterday, and to day, and for ever.” — Hebrews 13:8 KJV
Bethel Crossroads Baptist Church
“At the Crossroads of Faith and Hope — Building Lives for Eternity“Loving God, Loving people, and Living the gospel.”
