Wealth Evaporates in U.S. as Fuel Prices Clobber McMansions, SUV Makers

[Purveyor]

By Rich Miller and Matthew Benjamin

June 9 (Bloomberg) -- Sky-high gasoline prices aren't just raising the cost of Eugene Marino's 120-mile (193-kilometer) round-trip to his job in the Washington area. They're reducing his wealth, too.

House prices in his rural subdivision beyond the Blue Ridge Mountains in Charles Town, West Virginia, have plunged as commuting expenses have soared. A four-bedroom home down the street from his is listed for $239,000, after selling new for $360,000 five years ago.

Homeowners in the exurbs aren't the only ones whose assets have taken a hit because of the surge in energy costs. Companies such as General Motors Corp. are writing off billions of dollars in plants and equipment that are no longer viable in an age of dearer oil. The destruction of wealth and capital will weigh on U.S. growth for years to come.

``Our whole economy reflects the relative costs of energy: the cars we drive, the houses we occupy, the kinds of factories we have and the equipment in them,'' says Dana Johnson, chief economist at Comerica Bank in Dallas. ``I'm expecting relatively large changes in all of these things.''

The loss of wealth could be a double whammy for the U.S. economy. In the short run, it depresses demand as homeowners save more and spend less, and companies fire workers. Longer run, it curbs productivity growth, as firms shift their focus from increasing worker efficiency to reducing energy costs.

---EOE---

http://www.bloomberg.com/apps/news?pid=20601109&sid=aFc9HNAhHrPc&refer=home

[liberal N proud]

1. It isn't evaporating...

It is being absorbed by the few. The oil barons and their cronies.

[Captain Angry]

2. They're not wealthy. They're rich.

Chris Rock said it best.

Shaquille O'Neal is rich. The guy who signs his paycheck is wealthy.

Rich you can lose in a weekend in Vegas.

Wealthy lasts for generations.

[Ichingcarpenter]

3. The housing Meltdown also prevents Home owners from taking

Jobs in other cites, counties or states.

If they bought their homes in the last 5 years they will suffer a major loss and debt upon selling.
So, if they got an offer of a higher paying job in another location, they can't afford to take it.



ECONOMIC SOCIAL MOBILITY will remain stagnate and reverse itself.

[shraby]

4. I take issue with this statement in the article

"The loss of wealth could be a double whammy for the U.S. economy. In the short run, it depresses demand as homeowners save more and spend less, and companies fire workers. Longer run, it curbs productivity growth, as firms shift their focus from increasing worker efficiency to reducing energy costs."

I don't see homeowners having anything TO save. After the bills are paid (hopefully) and food and gas are purchased, what's left? A huge goose egg.