It's simplistic to blame higher oil prices on China's insatiable demand for oil and America's love affair with the automobile. And of course, in an election year, there's another politically convenient villain oil industry executives.

But one of the biggest reasons for the pain at the pump can be found in your wallet. A weak U.S. dollar increases the cost of oil and other imports for American consumers.

For months, the Fed had aggressively slashed interest rates to stimulate the U.S. economy. But that came at a cost. Lower interest rates also weakened the dollar against other currencies and, likewise, increased energy expenses in family budgets. With oil prices at well over $120 a barrel, the dollar's impact on soaring energy prices is no longer an afterthought.

The more people spend on basic transportation, the less they save or spend on other goods and services. Meanwhile, higher energy costs drive up the cost of manufacturing and shipping, which eventually trickles into the prices that consumers pay in stores. This cycle leads away from a broad-based economic recovery, not toward one.

Federal Reserve chief Ben Bernanke is right to suggest a pause in the Fed's string of interest rate cuts. The weak dollar, which made U.S. goods more affordable overseas, provided a buffer against a more devastating economic downturn in the United States. But right now, this benefit is more apparent on Wall Street than on Main Street because $3.50-a-gallon gasoline and escalating grocery bills are emptying pocketbooks.

The Fed clearly needs to stem the dollar's decline, assuming the economy specifically the housing and credit markets allows it to hold the line on future rate cuts. But those crises aren't yet in the rear-view mirror; the economic recovery is a moving target.

That latest target is the price of energy and its impact on American wallets. Households are financially stressed, and, regrettably, there's a great deal more pain ahead before the U.S. economy recovers.


—The Dallas Morning News