Gas Prices the Beginning of Inflation in SWFL

The war in Iran costing you more money at the gas pump. Gas prices soaring across the Sunshine State. Triple AA says you can expect to pay at least $3.72 for one gallon of regular gas, with premium gas closer to five bucks a gallon. You'll find some of the highest prices in the state. In Hendry and Collier counties. Experts say the steep hike in gas prices due to the ongoing war in Iran, with no immediate end in sight. For more on the surge of inflation and the impact that it is having on Southwest Floridians, we are now joined by Doctor Victor Klawe, a professor of economics here at Florida Gulf Coast University. And you just walked across from the Legat Business School to join us today. Thank you so much. I did great to be here. It's it is great to have you because you have such a great perspective and expertise on what is going on right now. As far as the root cause of inflation. We are seeing gas prices really almost at the level they were around the pandemic time. I know almost five bucks a gallon for for premiums. So there are a lot of people very concerned about how far our dollar is stretching right now. Can you touch on your perspective of the the cause of this? Americans have been facing a relentless onslaught of inflation since the beginning of the pandemic. Just from 2020, about six years ago now, seems like distant memories, but it was very real. Prices rose just from 2020 to 2025 alone by about 25%. And I don't know about you, but I think me and most Americans have not received a 25% increase in their pay, and if they did, that would just help them catch up. Now, I know inflation rates have been better lately, but inflation always punishes working class people the most because the things that hit them the hardest. Food prices and oil prices and and and shelter prices, those are things that are a really big share of their budget. Those tend to be the things that increase the most. They definitely increase the most during the pandemic, and you feel like you haven't been able to get a break. I know inflation rates are lower now, about two and a half, 2.6%, but it doesn't change the fact that prices continue to go up. Sometimes there is this lie we tell to ourselves that when inflation is not as big as it was last year, that we're doing better, but it's a little like if you've been gaining weight, maybe at 10 pounds a year, and then one year an amazing thing happens. You only gain 8 pounds, you're still not moving in the right direction. And that's what what's happening with prices, right? That's a great analogy. And we also obviously have what's going on with the war and the impact that that is having. And what is the expectation from your perspective for the next month or two. How do you see this shaping up as far as inflation and even the CPI, the consumer price index, increasing oil prices are especially tough because we don't have an abundant supply of oil ready to go at any given instant. Normally it takes about six weeks for newly extracted oil to be refined into a consumer product, whether it's jet fuel or gasoline at your local, your local gas station. That's a long lag, so it's hard to make more in a short amount of time. That's one of the reasons you see upward price price pressure really quickly in a short amount of time. The other reason is that most of us, we have the same cars and the same commutes and the same distances to school and to work. And so when prices rise, it's not like we can afford to cut back very much. So when you've got an inflexible supply and demand by Americans, that's also pretty inflexible, because they need to get to the places they have to go. Then you see really rapid increases in prices. And we've seen that with oil. How long do you project or see we don't have a crystal ball, but how long do you foresee this price hike in gas continuing? A lot of analysts envision two possible scenarios. One is that in the course of the next couple of weeks, maybe 2 or 3 weeks, the white House changes its posture on Iran and decides not to be as committed to its involvement as it has been during the run up to to to the end of March. If we see that, we'll see higher prices, maybe oil prices that are still above $100 a barrel, but not much higher than that. We may see consumer prices year to year that are somewhere around two and a half to 3%. The other scenario that a lot of economists see right now is that we stay in Iran for the longer term, maybe late into 2026 or even into early 2027. If that's the case, then we could see much more significant increases in the price of a barrel of oil, not $100, but maybe $140 or $150. And persistent consumer inflation. That is not 2.5% or 2%, maybe 4% or even higher. Still, we were discussing the CPI, the consumer price index. This impacts a lot of people when that would be increasing. Can you give us an idea? Explain what that is for our audience? Yeah. The Consumer Price Index is a monthly survey of the prices that real Americans pay for the things that they purchase most frequently. So it's a basket and it's not everything that consumers buy, but it's the things that they typically buy in a given month. And so the federal government thinks that's a nice way to measure consistently from one month to the next, what the real cost is of things like gas, food, shelter, all of those things, they're included. And they're the most basic things that a typical family buys in a month. So if that increases and continues to increase, we've got to tighten all of our belts. You know, the good news and the bad news about the CPI is it is a very realistic picture of what a typical family buys in a month. So it's weighted accordingly. For most of us, our biggest bill or shelter, whether it's our rent or a mortgage payment, that's our biggest bill. After that, things like food and gas are second and third, depending on which which year it is and what the weights in the basket are like. But the weights in that basket for the CPI, they're very representative of what actual consumer buying patterns are. So if the price of gasoline goes up a lot, so does the CPI. And you see that really, really quickly. Because not only is it a significant price increase right now, it's something that it's a big share of every American's budget. And because those are the basics food and fuel and and and the roof over your head, those are the things that punish all Americans, particularly working class Americans, because those are their main bills. And they have to figure out how to fit in other things around those three big things. What would be your advice to our audience about how can they best handle this and plan for, you know, maybe tighter budgets over the next coming months? So getting to work and not getting evicted and having food on the table, those are every family's foremost concern. So when you're making your budget for every month, you need to think first about how you're going to get those boxes checked and where the money will come for those things. Only after that should you think about where any money that's left in your budget, after you've taken care of those three big things, only then should you think about what you might be able to do with other money that's left over. So be laser focused on the things that keep your family alive and in good shape from one month to the next. Well, and hopefully this will be for the short term and not the long haul. Yeah, but at this point, nobody really knows. There's a lot of uncertainty. We've already had over a lot of uncertainty in the last nine months or so because of tariffs, and it's really hard for businesses to make plans into the future. And it's hard for American families to make plans. If it seems like every day we don't know which goods will be tariff, how how much the tariffs will be against different countries. And now we have even more uncertainty with the worry that a lot of people did not see coming. And with an uncertain end date, that you studied economics from a Christian perspective, you authored a book you mentioned almost 20 years ago about it. How does that impact how you view and see our future and our economics that we're dealing with right now? Sometimes I think there's a temptation for economists to be so focused on the scoreboard. What's happening with GDP, what's happening with economic growth, what's happening with the unemployment rate and guess what's happening with inflation that we forget that every policy change we make affects real people with real goals and real ambitions and real obstacles that are known only to them as individuals. So one of the things that my coauthor, Robin Clay, and I try to accomplish in our book is communicate that when we think that we're very good at managing the economy, in fact, we may be getting in the way and doing things that are counterproductive for the individuals with names and faces and real lives and real choices that they're trying to make. If policy introduces even more uncertainty and even more disruption, it can be counterproductive in terms of the individual decisions that families are trying to make in order to have a good life. Yeah. And any other thing that you would like, like to share about that, I wonder, do you have hope that this is going to, we are going to have a brighter outcome in the future? One of the things that Robin and I talk about in the book is that from the beginning, economics has had really deep roots in what what philosophers would call moral science. Even Aristotle studied economics because he thought that the pursuit of a good life or a virtuous life was really important. And if you understood the price system and the economic order better, you could live a better life for yourself and your family. Catholic economists like Saint Thomas Aquinas, great theologian but also a great economist. He had the same idea. But he also realized that we were put here for a purpose. And it wasn't just what a virtuous life looks like for you, it's also a virtuous life in terms of what it looks like when you have to be accountable to your master, creator, Father, God himself. And so if you understand the economic order better, you can live your life even better, and you can live it more faithfully in terms of what God expects of you. Thank you so much for your perspective, your insight, and, providing, I think, some hope for our current times. We're all dealing with, I think, a lot right now when it comes to budgeting and and the prices. So thank you for this insight. You're welcome. Great to be here. Yeah. We'll get you again soon. You're just, you know right across the parking lot. That's right. All right. Thank you so much Doctor Clark. Thank you.