We’ve all seen the price of a barrel of oil plummet over the last few weeks to half of what is was in the summer, now $70-$75. While gas prices at the pump have gone down by a lot too, roughly 29% since July, that’s still not half (-50%) to match the decline in a barrel of crude oil. In fact, food prices which have been driven up due to energy, haven’t retreated at all.

Unlike food prices, commodities are set on the market everyday. In other words – when folks like you and I shop we buy products from brands that consist of commodities which themselves are interchangeable. The wheat, corn, flour and sugar that make up our favorite cereals are each commodities because they can be purchased from anyone. However, the end product that is our particular favorite is only produced by the brand that owns it. Therefore the wholesale price that is set for your grocer comes from the manufacturer, which in turn determines the price you and I pay.

Once these prices are increased, it’s very difficult to make them fall again, even when the price of its commodity inputs began to fall. Part of the reason is that price and wages are really the same in an economic model – how many of us have seen our wages fluctuate day-to-day? Only if the price of the competitor’s product falls or there’s enough excess inventory due to less demand will that cause a price retreat. This process takes time, far longer than what takes place within the commodity market.

What’s the take away here? Even when energy prices began to settle from their highs, the increase in the price of other goods that they have caused don’t follow suit and immediately settle, and certainly not to the same degree. We need our own energy now, in order to keep prices stable because there is residual inflation from energy price fluctuation.

During the second debate between Senators McCain and Obama, Obama stated that he planned to “spend $15 billion dollars a year for ten years to gain us energy independence.” McCain’s plan calls for a similar amount, with the price tags for both Senators economic plans totaling $150 billion.

OK…but didn’t we just cut a check for $700 billion dollars? Why not at the very least couldn’t we have spent a $150 billion right now for energy and $550 billion for the knuckle heads on Wall street. So now we have to stimulate an economic recovery with higher taxes, higher prices and less wealth (decreased home values and investment portfolios)…just doesn’t add to me.

I may just go Green and vote for Cynthia McKinney…