Wikinvest Wire

Drivers are feeling the pain

Friday, May 09, 2008

USA Today reports on how high gas prices are causing motorists to drive less, a trend that looks set to accelerate in the months ahead.
A related story about how resale prices for gas guzzling SUVs are tumbling makes the Clinton/McCain "gas tax holiday" proposals look sillier than ever before.

If policymakers would be half as proactive during the gestation phase of the current problems - energy and housing - we probably wouldn't be in such dire straits today. Instead, while that tiny, informed sector of the population began screaming about peak oil and the housing bubble a few years ago, policymakers were oblivious.

Unfortunately, that's just the way the system appears to work. With plunging home prices people are certainly changing the way they think about housing. Now, four dollar a gallon gas is making people change the way they think about energy.

Record high gas prices are prompting Americans to drive less for the first time in nearly three decades, squeezing family budgets and causing major shifts in driving habits, federal data and a USA TODAY/Gallup Poll show.

As prices near — or in some places top — $4 a gallon, most Americans say they are cutting back on other household spending, seriously considering buying more fuel-efficient cars and consolidating their daily errands to save fuel.

Americans worry that steep gas costs are here to stay: eight in 10 say they doubt today's high prices are temporary, the poll finds. It's the first time such a large majority sees pricey gas as a long-term problem.

The $4 mark, compounded by a sagging economy, could be a tipping point that spurs people to make permanent lifestyle changes to reduce dependence on foreign oil and help the environment, says Steve Reich, a program director at the Center for Urban Transportation Research at the University of South Florida.
Every time we pull up next to a middle-aged lady with some sort of a fast food-style uniform on who is loading up the Ford Expedition with $4 gas, it's hard not to feel some sympathy.

But, at the same time, unless some big new source of cheap oil is located, many changes by both consumers and businesses are needed that will not come about if policymakers step in and try to make things all-better.

It was nice to see the flogging by economists heaped upon the dopey "gas tax holiday", though, the unfortunate reality here is that most voting Americans probably don't give a damn about what economists think and just want someone to stop the pain.

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Anonymous said...

Maybe I'm a bad person, but I don't feel much sympathy at all. I read about peak oil and greenhouse gases years ago; I slowly, over the course of several years, changed my lifestyle as a result. Now I live in an urban area (got housing when it was still somewhat cheap), don't own a car at all, and take transit everywhere. I've bought one tank of gas in the last year--on a rental truck when helping a friend move.

I guess my point is, I didn't have any secret insider knowledge or anything; all of this was easily available, as your blog has chronicled for years. Whether because of willful ignorance or just because they thought God would help those who don't help themselves, others ignored it all. And I have a hard time feeling sympathy there.

Democracy Lover said...

You are certainly correct that some proactive policies earlier on might have mitigated this disaster, but can you think of any policy that could both make a serious difference in the economic situation in which we find ourselves and be politically feasible?

Tim said...

Not really, your options become much more limited seven-and-a-half months into an unwanted pregnancy - at that point none of them are pleasant.

Economic sensibility and political feasibility are two diametrically opposed forces that will somehow be resolved in the period ahead.

Anonymous said...

I get a good laugh At the suburbanites with the long commutes in SUVs with no choice but to drive. These same suburbanites fought against public transit for decades so they planted the seeds of the disaster they are harvesting.

In Chicago's suburbs public transit in minimal at best and downright non-existent as the norm, with a bus system run by a bunch of incompetents in a landmass poorly suited for transit in the first place. And the incompetents are the mayors of suburbs!

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