Transcript: Hofstra University Professor of Economics Martin Melkonian

Transcript:

MARTIN MELKONIAN,

ASSOCIATE PROFESSOR AT HOFSTRA UNIVERSITY

Amanda J. Rhodes, NassauNews.org: Can you state your name and your position for me?

00:00:03

Martin Melkonia, Adjunct Associate Professor of Economics, Hofstra University: Martin Mekonian, Adjunct Associate Professor of Economics

00:00:07

NassauNews.org: Okay, and can you explain to me a little bit why we’re noticing all the price increases at the grocery stores?

00:00:15

MM: Well we’re suffering a general rise in inflation and one of the aspects of inflation are food prices. And food prices in turn are being affected by the particularly sharp rise in energy costs. See, food is transported from lots of different areas and with gasoline and other fuels rising in price that’s raising prices to the truckers and so on, and they passing on these rising costs to the consumer. That’s one reason. The second reason, I think, relates to also energy. The fact that congress has decided to subsidize ethanol, and that in turn is meant farmers are switching from grain crops, that are provided for food, to producing fuel. And the result is, that switch has meant, that there is less a supply of grains, which in turn is resulting in higher prices in grains. So, people who are growing these grains are now getting much higher prices and that’s being reflected in the final cost of almost everything that’s made with grain, ranging from bread to meat.

00:01:37

NassauNews.org: What are our options? Is anything in site, I mean, are prices going to go down ever? What does the future hold?

00:01:47

MM: Let’s put it this way, prices haven’t gone down in any systematic way since the 1930’s. They’ve either gone up a little bit or gone up a lot. We’re in a position now where they’re beginning to go up a lot more than normal. So, we’re facing inflation. As again, the reason I think, has to do with both higher energy costs, but also certain other costs that continue to push up prices, like medical costs, cost of education, food costs. All of those are pushing prices upward. And there’s one other factor that’s important, and that is the rising cost of imports, which are related to the weakening of the US dollar on the international scene. So, all of these combined suggest to us that food prices and prices in general will go up. In my mind there are ways of reducing this and one way would be to begin to focus in on finding substitutes for oil and perhaps the most efficient substitute for oil is efficiency. By that, I mean finding more efficiency ways to run our vehicles and run our appliances.

00:03:05