"Well, economists would say that in every person a little economist lives, so people we would expect would make changes over time. Yes, we will complain about gas prices, but we will make changes. And what we will work on is part of the cost equation. What you pay for something is based on two things: price per unit of that something, like a gallon of gas, and the number of gallons, the amount that you buy. And what people are doing right now is they're working on getting the number of gallons they buy down so that they can keep their costs under control. And so we see data, for example, that show that drivers now are actually driving fewer trips per month. They're driving at lower speeds. They're actually improving their fuel efficiency, and, therefore, they're cutting back on the number of gallons of gas that they buy. Now, we perhaps don't like this, but we're doing it. And the result - very interestingly - is that over the last month, the aggregate amount spent by consumers on gas has actually held steady, and that's because - we can't do anything about the price - but we are cutting back on the quantity."

"Well, if there is some good news here, it is that we aren't alone. Other countries are also experiencing rising inflation. Let me give you a few numbers. Europe - most of Western Europe - is experiencing inflation about where we are, a little shy of 4 percent. The latest reading for Europe is about 3.7 percent. However, you go to China, they're experiencing inflation of over 8 percent per year; India, 7 percent; Russia, 15 percent a year; and Venezuela, 31 percent annual inflation rate. Now, at the other end of the spectrum, there is one country that sticks out right now, having a very low inflation rate. That is Japan. Their current inflation rate is around 1 percent. In general, what we're finding around the world is countries that are growing very fast - and those would include countries like China, India, Russia, Venezuela - they are the countries that are experiencing the highest inflation rates."

"Well, fortunately most people aren't economists, so they don't look at inflation the same way economists look at it. The way economists look at inflation is we look at the rate of increase of prices of everything that we buy over the course of a year. And, for example, if we do that, we find that actually the inflation rate over the past year has been about 4 percent, admittedly much higher than a couple of years ago but no where near the record. Most people - again, who aren't economists - however, form their perceptions of inflation based on things that they frequently purchase, not everything but things they frequently purchase. So, for example today, if you look at gas - something most people buy every week - food - something most people buy every week - those items just happen to be the ones that are going way up in price. On the other hand, vehicles, which we don't buy every week, clothing, electronics - we may buy some of them over the course of the year (incidentally, those are all items where the prices are going down), we don't buy them every week. So the bottom line is, yes, I think there is a disconnect between the way economists look at inflation and the way the average person looks at inflation. Indeed, there have been studies that showed that when prices are rising, perceived inflation - that is, what people think the inflation rate actually is - can be five to six times higher than the actual inflation rate."

"You have to be careful here. Of course the property tax bill - the tax you pay - is going to be a function of the value of property and the tax rate. And of course, as you said, in counties where there's been a recent reevaluation, your value of your property has definitely gone up. Now, when you hear about, however, your county or city increasing your tax rate, first you have to ask, What are they increasing it from? And usually what happens in counties and cities that have had a reevaluation is first, they will adjust the property tax rate to what's called a revenue-neutral rate. That's a rate that will give the tax bill that the average person pays no increase over the previous year. So then what happens if they say they're going to increase their tax rate, usually it's from that revenue-neutral rate, which is going to be much lower than the rate last year. So the bottom line here is that, yes, people may see their tax bill go up and they may look at the reevaluation and the tax rate increase and say, 'My gosh, this is going to be a gigantic increase.' But usually it's not, and it's because you have to be very careful in looking at that tax rate increase and make sure that you're looking at it from the basis of the revenue-neutral rate, which is going to be much lower."

"Well, of course the Federal Reserve really takes the brunt of the effort to stimulate the economy when it's in dire straits, and to stimulate the economy typically the big ammunition the Fed has is to lower interest rates. So clearly the economy is still sputtering right now, so there would be pressure for the Federal Reserve to lower interest rates so that people can go out and buy a lot of those homes that are on the market and buy cars and stimulate production. But the consequence of that - the negative consequence of that - is that, I think it's clear that part of the reason for higher oil and gas prices is due to the Federal Reserve's efforts to lower interest rates, which have led to a lower-value dollar. Of course, oil is priced in dollars, so as the Fed has pushed down interest rates, oil prices have gone up. So that's the dilemma the Fed is in. On the one hand, they perhaps want to consider lower interest rates. On the other hand, however, they know if they do that, that's going to send probably oil and gas prices even higher and spark even higher inflation. So this is why we pay those big bucks to those folks on the Federal Reserve Board, because there's not a clear answer. The Fed will have to choose what to do, and whichever way they go, there's going to be some negative effect."

"I think this is a great story. A good example is solar canopies in parking lots. Now, what am I talking about? Well, if you look at the amount of parking lots we have in our country - you add them all together - they take up an area the size of the state of Connecticut. They're out there. They're usually open areas, a lot of sun. Of course, we see that in the summer. So one company has come up with the idea of putting what's called solar trees in parking lots to collect solar power, and we may use this power in the future, for example, for people to come up and plug in their hybrid cars to rev up the batteries. So anyway, you put these solar trees in a typical parking lot; it's estimated that that solar power could provide enough energy for 500 homes for a day. So, are we going to see this tomorrow? No, not all over the place. But I think the point is that this is an example of, I think, one of the big strong points of the American economy. There are people out there thinking - all right, energy is a problem, what can we invent, what can we do to cope with it - and I think the solar trees in parking lots is a perfect example of the brilliance of the American economy."

"We're talking about consumer inflation, and I'd have to say the report was mixed. If you look at the overall inflation rate, what's called headline inflation, over the last year, from May of '07 to May of this year, the inflation rate was 4.2 percent, clearly higher than what we've gotten used to a couple of years ago but not devastating, certainly not double digits. But if you go inside those numbers, certainly some items are up much faster. Food prices over that year were up 5 percent. Transportation - led by, of course, gas - up 8 percent. However, outside of food and fuel, the inflation rate was a much more modest 2.3 percent. Some prices have actually fallen. Clothing prices are down over this last year. Car prices - not driving a car - but the price of a car is down. CDs, computers and other tech equipment, all those prices are falling. I think the problem though is that food and fuel are things that people buy every week. Sometimes, people buy them a couple of times a week. That's what they see, and they see those going up rapidly, and I think that's causing most people to think, gee, the overall inflation rate is much higher than the reported rate."

"This is important not only because some people may not be able to take their vacation but because a large segment of our economy depends on tourism. We know that here in North Carolina you go to the coast or to the mountains, a lot of people depend on those tourist dollars, so this is very important stuff. Well, I think a couple of pieces of good news on this front. One survey showed - and, of course, we can't always rely on surveys - but they do show right now that a majority of households say that they're not going to let high gas prices stifle their summer vacations. They're still going to take their summer vacations. That's good news. The second piece of good news is that if you work the numbers, yes, gas prices are certainly up - a lot, over 30 percent this year - but if you compare, for example, driving 1,000 miles by normal car, compare the cost of doing that this year compared to last year driving 1,000 mile, it's going to cost you about $30 more this year. If you're driving an SUV 1,000 miles, it'll cost you about $40 more this year. So I think put in context, yes, people are going to spend more on gas for their vacations, but it's perhaps something that's manageable, and people are going to look at that extra $30 or $40 and say, 'Look, it's worth it, it's worth it for me to get away, get away with the kids, do something fun.' So I think the bottom line is that we may not have as bad of a vacation summer, and those businesses may not be suffering as much as you might think because of high gas prices."

"This economic slowdown - and we don't yet know if it's a recession - has really been perplexing to economists because, actually, if you look at it in terms of the broad numbers, clearly we're not doing as well as we did a year or two years ago. But in terms of slowdowns, we're actually not doing that badly. And I think one reason is that most of the problems have been confined to the sectors we mentioned: housing and autos. So if you look at the economy outside of housing and autos, it's actually growing at a 4 percent rate, which is as high as any time in the last four years. I think there are two factors behind this good news. One is the export market. The export market is booming because of the low-value dollar. It's really helping our factories; factories would be in much worse shape if it weren't for the export market. And then secondly, most businesses have learned to keep inventory very low. Computers have helped in that regard. So that means when there is a slowdown, they don't have to send as many people home because they don't have to sell out of inventory. So I think the strength of the economy outside of housing and autos is one reason why many economists who look at these numbers say, well, the economy's actually doing fairly well, and job losses - again relatively - have been fairly light during this turndown."

"Again, to emphasize, what we're talking about here is certainly farming, but then what you do with those farm products, you process them, then you take them to a wholesale level, then you take them to the retail level. We're including all of that, and we're looking at it for the food products, natural fiber products and forestry products in North Carolina. So that's what we're talking about. And I actually generate these numbers every year, and they're very impressive. The most recent numbers we have show that industry - agribusiness in North Carolina - generated $71 billion (that's with a 'b')of economic output. That accounts for just shy of 20 percent of our total state economy. And those numbers - that percentage - has held rather steady over the last few years. In terms of jobs, agribusiness accounts for 644,000 jobs in North Carolina. That's 16 percent of all workers, so this is a gigantic industry when you look at what happens on the farm and take that all the way, really, to the supermarket counter. This is a big industry that's very, very important to our state."

"Of course, this is very, very important right now, not only because we're in a national slowdown - a recession - but because obviously a state's economic growth has an impact on the state budget. And of course we have legislators in town in Raleigh now talking about and making decisions about the state budget, and how much money they have available is due in part to how the state is doing economically. So that all said, the news is actually very good for North Carolina. In 2007, we were in the top 40 percent of states in term of economic growth. If you look at the 12 southeastern states, and that's ranging from Louisiana up to Kentucky and Virginia and down to Florida, North Carolina, among those 12 states, had the fourth fastest rate of economic growth in 2007. Now, in terms of which state was the fastest and which state was the slowest in 2007, actually, interestingly, New York state - New York - had the fastest rate of economic growth for any state in 2007. And not a surprise, Michigan, due to problems in the auto market, had the slowest rate of growth. But this, indeed, is good news for North Carolina. Typically, during economic slowdowns, we don't do very well, but we're actually doing fairly well comparatively during this slowdown."

"We do. Fortunately, there's a private group that puts these numbers together. They actually put them together every quarter. The costs include all the major consumer costs: housing, food, clothing, transportation, taxes. And what this group does is they rank states from the lowest cost to the highest cost, and they also compare them to a national average. The latest data, which was actually for the first quarter of this year, shows that North Carolina ranks 25th, right smack dab in the middle among all states in terms of a statewide cost of living. We actually had a cost of living slightly under the national average, about 3 percent under the national average. In terms of the components, we are lower on housing costs and utilities costs compared to the nation, but we're slightly higher on groceries and health care. The lowest cost of living state on the first quarter of this year from this organization is Oklahoma. The highest cost of living state right now is California."

"Well, I'm going to warn our listeners to hold on to their wallets and their pocketbooks, because we're going to talk about some big money. Each year the government does put together numbers estimated to be related to the costs of raising a child. They look at a child from birth to age 18, and they look at costs related to - obviously - food, clothing, medical, entertainment, plus the government does take a share of the price of a home and vehicles, with the notion that bigger families need more vehicles or bigger vehicles, more home, so you should apportion some of that cost to the children. And the government also does assume in looking from birth to age 18 a 3 percent inflation rate each year. So we're talking in economics lingo about nominal dollars, the dollars that actually go out the door. And the last thing the government does, they have three standards of living: low, medium and high. Here are the numbers. To raise a child that would be born today through age 18, if you had a medium standard of living, $269,000 over that time period. If you had a lower standard of living, it's estimated to be $196,000; higher standard of living, $393,000. Now, this is for one child. If you do have multiple children, then the numbers, you wouldn't necessarily multiply by two or three because there are some economies of scale of raising more children, some things need to be shared. But clearly, these are large numbers, and I think that's one of the reasons why raising children today is so challenging."

"Well, of course, many people are saying, 'Will gas prices ever fall?' in the first place. But I think if gas prices do fall - and there are some economists that think they will - and people think they'll stay at that lower level, then yes, I think we would go back to some of our older habits. People would drive more. They'd move away from fuel-efficient vehicles. Fewer people would use mass transit. So what this has done is actually sparked some debate about whether the government needs to do something to keep these changes that people have made in their driving habits permanent. And what's been talked about is a floating gas tax. That is, the argument would say we're never, we're never going to allow, say, gas go below - oh, we'll pick a number - say $3.50 a gallon. If it does, we're going to automatically increase the federal gas tax to keep it at that point. And therefore, this is going to motivate people to do all the things that we've talked about, many of which, for example, those who are concerned about the environment applaud. Now, wouldn't this make us all worse off, keeping gas prices at some high level. Obviously yes, but here's the second part of the plan. The extra money the government would collect would be rebated - maybe on a monthly basis - back to drivers in terms of checks. So in terms of your household budget, you wouldn't be worse off. Now, wouldn't people just take that money and buy more gas? No, that's where economic analysis comes in. Yes, they'd take maybe a little bit, but most of it they would spend on other things. And so the notion is that we'd sort of have our cake and eat it too. We would have all these changes that people have made kept permanent, and yet economically we wouldn't be worse off. This is a big idea. I don't see it being implemented anytime soon, but it is being discussed."

"The downside is you run up against something economists call the 'rent gradient.' And what this simply means is that locations - residential locations that are closer to centers of economic activity, be they centers of work, centers of shopping - are more valuable and more people want to be there because it does cut down on commuting costs. But therefore, they are going to cost more. So the point being that most people will find that if they move closer to their place of work, closer to where they go to school, closer to areas where they shop, they are going to find that the price per square foot of homes is higher, rents are higher for apartments. What this means is that if you have a budget for housing - you can only spend so much on housing - if you do move closer, let's say to your place of work, you're probably going to only afford less housing space. You are going to maybe have to cut down from a 2,000 square foot house to an 1,800 square foot house. So the tradeoff here is that yes, you can reduce your gas costs, you can lower your commuting costs by moving closer to where you work and where you shop and where you go to school, but what you'll probably have to give up is you will have to live in a smaller residential unit."