The spike in the price of oil has many people singing the blues, and using it as an excuse for nearly every imaginable problem.
Oil has been a scapegoat for the weak stock market, poor sales at Wal-Mart, tough times at Bob Evans restaurants, and a bad summer at the movie box office. Conventional wisdom is, gas costs so much that the average family can't afford to buy gas AND shop, eat out, or go to a movie.
Nobody likes to spend $50 to fill up his gas tank, but I'm not sure I buy the conventional wisdom that high prices are to blame for all that ails us.
How many times have you heard on the evening news something like, "The stock market dropped today on investor concern about the rising price of oil..."?
When the anchor makes that statement, most people take it as gospel for why stocks dropped. Why not? It sounds reasonable.
In reality, there is nothing more than random correlation between the daily price of oil and that day's direction of the stock market. The stock market and oil prices zig and zag almost without knowing the other exists.
What about the consumers getting socked by gas price woes? What's the real out-of-pocket cost?
Let's assume you drive 15,000 miles a year, and your car gets 20 miles to the gallon. With those assumptions, you buy 750 gallons of gas every year.
According to the U.S. Department of Energy, the price of a gallon of gas in the Midwest has gone up 86 cents in the last five years, to $2.52. This means your annual gasoline cost is now $645 more than you spent five years ago.
This equates to 54 extra dollars a month on gas. Sure, $54 is nothing to sneeze at, but that equals one dinner a month at a chain restaurant for you, your wife and your 2.1 children. Dinner only, no drinks or dessert.
If you're an average reader of this paper, $54 a month equals 0.3 percent of your income.
It's hard for me to believe the equivalent of one dinner a month will make or break the average family's monthly spending at Wal-Mart.
Most folks in the checkout line apparently aren't bothered by the gasoline costs, since retail spending has increased 25 percent in the last five years.
Restaurants haven't been hurt by oil, either. Sales for the last five years at "food services and drinking places" have grown at twice the rate incomes have grown.
Within five miles of my house, I'll bet 20 restaurants have gone up in the last five years-and they all have 45-minute waits!
As for Hollywood playing the oil card, I doubt the blame lies at the gas pump. I think the reason revenue has been dropping three years in a row just might be related to content.
If just oil were to blame, most forms of destination entertainment would be affected, too, and they're not. Theme park attendance has been hitting record highs. It takes a lot more gas to get to the amusement park than it does to get to a movie theater and a lot more money once you get there.
I believe excuse-makers are using the price of gas to justify keeping their jobs.
In mid-April, I said I thought the price of oil would fall to $40 before it hits the $100 level many pundits are predicting.
I'd still make that bet, and while I wait, I'll take my wife to a nice locally owned restaurant and see what $54 will buy.
Gilreath is co-owner of Indianapolis-based Sheaff Brock Investment Advisors, money management firm. Views expressed are his own. He can be reached at 705-5700 or email@example.com.