Ink Spots
We tend to think that what’s happening in the wider world doesn’t affect us much here in Rockbridge. Rec essions and expansions are felt here, usually six to 12 months after they hit the national economy, and they don’t tend to be as deep or as elevated as the national numbers. But the economic drivers at work nationally may be affecting our local economy more immediately.
Gasoline and egg prices seem to be the benchmarks that many people use to judge inflation these days. Perhaps that’s because they are such staple items that everyone buys on a regular basis. We buy them often enough to notice immediately changes in prices. Gas prices are easy to track – most every gas station posts them on large signs.
A gallon of regular gas at the bottom of my hill in Fairfield had been between $2.69 and $2.79 for months, since last fall. It had been slowly trending downward over the past two years and got down to $2.64 early in February. Monday afternoon, one of my neighborhood stations was charging $3.59 a gallon.
Gas prices may be just the most obvious manifestation of the impact of this misadventure in the Middle East. Diesel prices have jumped more than gasoline, and that will ripple throughout the economy as it directly affects transportation costs, ultimately adding to the cost of most everything we buy. Overall inflation has remained relatively in check because many sellers have absorbed a goodly portion of the tariffs imposed over the past year. With the addition of higher transportation costs, they are not going to be in a position to absorb those, too.
A saying I’ve hear several times lately is that “gas prices go up like a rocket and down like a feather.” I think we’ve all seen that in action.
Last week, I wrote a piece on the role that tourism plays in our local economy for the chamber of commerce’s 2026 community guide, which we produce. One statistic from that story provided by our local tourism bureau indicated that, in 2025, 23 percent of all spending in the Rockbridge area was attributable to visitors. If higher gas prices cause people to curtail their travel, that will have a direct impact on our local businesses.
Looming cuts to Medicaid have already financially affected our local hospital systems and health care clinics. Augusta Health closed three clinics in their coverage area last year, and told us that they were cutting all print advertising for this year. That hit The News-Gazette directly, and reduced their outreach to their customers and patients. And, of course, those cuts will mean that hundreds of our neighbors may lose their health insurance. Besides affecting their health, that puts more of a strain on hospital emergency rooms, as they become the last option medical care provider.
A key role of the federal government is to provide stability and some measure of certainty to the economy. That was the rationale behind such programs as the federal crop insurance for farmers, the requirements for minimum capital reserves for banks, and the Federal Deposit Insurance Corporation. Businesses are more likely to thrive when managers feel confident in the future direction of the economy. Uncertainty breeds caution, reduces investment and business owners’ willingness to take a risk on new ventures.
The past year has been one of uncertainty over tariffs, inflation, and the underlying strength of the economy. The national economy, as evidenced by the stock market, seemed strong, until the past weeks, but much of that is influenced by the fewer than 10 stocks heavily invested in artificial intelligence. Wall Street may be booming, but Main Street is hurting.
Economics is not an exact science, but when the advice of trained economists is disregarded, when TV personalities and conspiracy theorists are put in charge of health policy, and the needs of small towns and rural areas are ignored, those national issues are going to start to bear on our local area.
