Opinion | Paul Olson: Rising prices and the Summit economy

You pull into a Summit County gas station. Which would you prefer?

  1. $7 per gallon of gas, or
  2. No gasoline

You cuss a little while you fill up your tank but you must admit that expensive gas is better than none at all. Our free market economy is always working to have the supply of products meet your demands, though sometimes at a higher price if there is a pandemic, war or computer chip shortage. But the efficiency of capitalism is of little comfort to the person who must buy gasoline out of necessity to get to a job.

I remember ancient times when gas was 35 cents a gallon. It seems just as much a fantasy that $7 per gallon is coming some day. In a positive note gas prices actually dropped 10 cents a gallon across the U.S. in early April due to a decrease in consumption in March which was caused by the high prices (the free market again).

Gasoline prices are probably the most visible and irksome of the higher prices we are all experiencing. The inflation rate for the past 12 months has been about 8%.

Many politicians have placed the blame for the higher prices on greedy corporations. This plays well with voters and deflects attention from the $3.6 trillion in COVID spending by the federal government since the beginning of the pandemic. There was merit in some of this spending, in particular providing COVID vaccines and testing, and equipment for health care workers, but Congress overreacted to the pandemic and we have had an excess of dollars in the U.S. economy chasing a limited supply of goods and services, helping to fuel the current inflation.

You and I also get some blame for a higher Consumer Price Index. Individuals received over $800 billion in federal stimulus checks and those of us who didn’t need it for necessities went on a spreading spree. We have enjoyed the benefits of this in Summit County. The pent-up demand for travel resulted in strong revenue to local businesses in 2021. Higher fuel prices may deter some visitors for the remainder of 2022 but expensive gas could actually help local businesses as some travelers may decide to not drive to California or Montana and instead vacation closer to home in Summit County.

Vail Resorts recently announced raising the price of the Epic Pass by about 7% for next year. Is this corporate greed? No, Vail Resorts is subject to all the free market forces of other corporations and cannot let greed get in the way of sound business decisions. Vail also announced they would pay all employees in the U.S. a minimum of $20 per hour next year. Whether you love Vail or hate them, the company deserves praise for establishing a new pay scale in the recreation industry and showing more appreciation for employees. As with Vail’s Epic Pass price hike, the pay increase it is just a component of the decision making process that is aimed at satisfying customers, dealing with rising expenses and matching the competition in order to maximize profits.

The U.S. Census reports that in 2019 76.6% of Summit County residents commuted to work alone by car. A silver lining in the cloud of higher gas prices is that more people may be nudged toward using the free Summit Stage or carpooling. They will save money and help to relieve traffic congestion and pollution. Bustang, operated by the Colorado Department of Transportation, provides a convenient and economical option for travel to Denver. Bustang has regularly scheduled service to many Colorado cities, including Fort Collins, Colorado Springs, Durango and Grand Junction. It is good to have some options for thumbing your nose at the oil companies.

The rising cost of gas, food and rent is especially tough on lower income workers. The Family Intercultural Resource Center has seen a surge in visitors to their food markets during the past year. The center has a food market in Dillon and a thrift store and food market in Breckenridge. Summit County Government provides a number of services for those in need but we are fortunate to have nonprofits like the resource center to provide a vital safety net.

Congress will be tempted placate inflation-weary voters by spending even more money, but this will just make inflation worse. The free market is working out the shortages and supply chain problems that caused a portion of the inflation.

We must be patient and let the Federal Reserve increase interest rates and slow down the economy. I expect to pay a little more for a burger and a beer during the coming year as Summit businesses try to cover their higher costs. I will feel better about paying extra knowing that part of the increase is going to pay the higher wages that have become the norm in the county, helping our essential workers to be able to live in and enjoy Summit County.

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