Thirty-five years ago, the price of a barrel of oil quadrupled. A generation of activists empowered by the civil rights and antiwar movements took to the streets demanding that employers raise wages to keep up with inflation and that the government take action to keep prices in line.

Under pressure, the Republican administration of Richard Nixon instituted limited caps on gas prices and new fuel efficiency standards for automobiles.

When the price of crude oil quadrupled last spring, however, big oil made a killing while the rest of society suffered.

For years, Americans have spent about 4% of their income on gas. Now, in many places workers are spending on average 16% of their income on gas (NY Times, 6/9/2008).

And if the average is 16%, then some people are paying much more. For some, the cost of driving to work has become like paying rent twice.

Under pressure from huge public anger, politicians have been forced to speak out against the outrageous increase in gas prices but are largely avoiding proposing any real solutions to this mess. Neither John McCain nor Barack Obama are interested in introducing price caps.

In a June 10 CNBC interview, Obama said: “What is true is that given the global price of oil right now that we can’t artificially lower gas prices … I think that I would have preferred a gradual adjustment.”

Food is also costing more, according to the Bureau of Labor Statistics. Food prices rose 4% in 2007 and are expected to rise 4.5 – 5.5% this year. McDonald’s is even talking about raising the price of some items on its dollar menu.

Staples such as bread, milk, eggs, corn, and flour are rising sharply, with milk prices up 26% and egg prices up 40% in the last year (Boston Globe, 3/9/08).

Skyrocketing prices have led to food riots and mass labor strikes around the world as poor people desperately struggle to stay alive in a world where corn and soybeans are grown for the profitable ethanol industry instead of food. In Haiti, poor people have even had to resort to eating “mud cookies,” a mixture of oil, sugar, and mud (National Geographic, 1/30/08).

While prices for life’s basic necessities keep rising, wages have failed to keep up. Since 1979, while productivity climbed 60% in the U.S., inflation-adjusted wages remained essentially flat. According to the NY Times, in “the final year of the most recent expansion, the median family, amazingly, seems to have made less [than in 2000].” (4/9/08)

Now, big business wants to pass off the costs of the recession by raising prices and laying off workers. Unemployment has officially risen in the past 12 months by 1.6 million people to 5.7% (8.8 million people).

Not everyone is suffering from the high prices, however. For example, Exxon Mobil made $11.7 billion in profits in the second quarter this year, more than any company in world history (Wall Street Journal, 8/1/08)!

Wall Street speculators have also profited immensely from the surging costs of oil and foods. As they buy commodity futures in the hunt for quick profits, they add to future demand, driving prices up even further.

In 2003, there were $13 billion invested in major commodity funds. By June of this year, this figure swelled to $260 billion. During that time, the price of the real commodities traded on those markets tripled (Financial Times, 7/25/08).

What Can We Do?
It is untrue when politicians claim there is nothing they can do about the rising price of gas. They should immediately place caps on the price of gasoline, heating oil, and essential foods. The government was willing to intervene in the economy to bail out Fannie Mae and Freddie Mac; they should bail us out, too.

We also have to urgently build a mass movement to demand the minimum wage be raised to $12.50/hour or $500/week so workers can cope with higher prices. All wages should have built-in cost of living adjustments, so if prices go up, wages go up automatically.

Improving wages and prices will not be enough, however. The world’s vital energy resources have been run for the profits of a few for far too long. The U.S. is spending hundreds of billions of dollars every year fighting wars in the Middle East to secure control over profitable oil reserves when there is an infinite amount of wind and solar energy readily available.

We should nationalize the oil companies and giant banks that have been profiting from high prices and democratically decide how to use their billions of dollars. The government just took control of the failing IndyMac bank to save the financial system; they should do the same to these profitable companies to use their resources to help working people.

With the vast resources of the oil companies and banks, we could build windmills and solar panels to generate cheap and environmentally friendly energy. We could build a whole new infrastructure of electric busses and trains to provide free, quality public transportation so people do not have to rely on their expensive, polluting cars to get to work.

And rather than letting General Motors and Ford lay off factories full of workers who were making gas-guzzling cars, we should take over those factories and retool them to make electric cars, busses, and public transportation equipment.

A better world is possible if the working class ran the economy democratically instead of letting the investor class run it for their profits. Join us in the fight for a better world!