gas prices

April 29th, 2008 | Posted by Smithers at 9:46 am in Politics |

I was listening to talk radio yesterday and, as usual, callers were complaining about gas prices. One guy stated that he wanted his son to be able to drive what ever car he wanted and as much as he wanted when he got old enough to drive but he did not think that gas prices would allow it.

Gee, you think?

People in this country really feel like it is their god given right to drive big cars and buy cheap gas. Maybe it’s good that a generation of kids grow up with expensive gas in order to change some habits.

A local radio talk show host stated the other day that politicians can do nothing about the price of gas. This is not true.

Gas prices are determined by supply and demand and the USA has plenty of demand for gas. Politicians have the ability to reduce demand by simply banning car use. There are plenty of cities in countries all around the world that restrict the use of cars on particular days of the week. Draconian? Sure. Effective at reducing demand for gasoline and reducing air pollution? You bet.

Wake up. Gas prices are not coming down unless demand comes down. Maybe then prices won’t even come down but if you are using half as much then you will be paying half as much.

As a side note, I was passed on the highway this morning by a GM Suburban Boundary Waters Edition. I had to laugh out loud.

  1. 17 Responses to “gas prices”

  2. By Tuffy at 9:58 am on Apr 29, 2008 | ReplyReply directly to this specific comment

    As a side note, I was passed on the highway this morning by a GM Suburban Boundary Waters Edition. I had to laugh out loud.

    What I think is funny is that very few people seem to be thinking about the longitudinal effects of rising gasoline prices to the point that they are no longer affordable.

    What’s going to happen is that families will begin to move their families back to the urban cores so they can be closer to their workplaces in the urban core, and thus save on personal transportation costs (who wants to ride public transportation into the city from a second or third-ring suburb on a regular basis?). Urban home prices will rise, and many otherwise dilapidated urban neighborhoods will become largely gentrified. Meanwhile, the lower classes will be forced farther and farther from the urban core because of the aforementioned gentrification towards now-rental communities in these second and third-ring suburbs. These lower classes will be the ones forced to endure long rides on transportation, and they will be forced to do it while living in communities that were not designed for high density living or for a population that doesn’t own cars. Thus, cities in the United States will eventually reflect the “European model” of rich on the inside and poor on the outside.

    But, it’s really going to suck for the lower classes.

  3. By eric at 10:09 am on Apr 29, 2008 | ReplyReply directly to this specific comment

    Boundary Waters Edition? I get it , you name a car after what it destroys. I think a better name would be something like deer smacker or moose muncher, wolf flattener.

  4. By dj at 10:19 am on Apr 29, 2008 | ReplyReply directly to this specific comment

    Maybe they should name it the Military Edition to commemorate the troops sacrificed to supply it with cheap fuel.

    Oh wait, they already make the Hummer. Never mind.

  5. By T at 10:36 am on Apr 29, 2008 | ReplyReply directly to this specific comment

    http://www.cnn.com/2008/US/04/24/beck.oil.prices/i ndex.html

    Interesting take on the situation.

  6. By Eric Smithers at 11:01 am on Apr 29, 2008 | ReplyReply directly to this specific comment

    Couldn’t agree with you more about policy changes. That’s the only advantage to these price hikes. In the meantime it’s people who drive these behemoth mobiles that are helping the cost increases.

  7. By Bike Bubba at 11:19 am on Apr 29, 2008 | ReplyReply directly to this specific comment

    Nothing draconian is needed; just shift the burden for building roads from vehicle registration taxes to the gas tax. And maybe impose a 10% tariff on imported petroleum as well.

    Look at a used car lot lately; you will see a lot of SUVs. People are capable of responding to price changes.

  8. By Ray at 1:01 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    Jeez, I’m living in a trendy real estate market.

  9. By Miranda at 1:10 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    Wait a minute! Isn’t the reason our men and women of our armed forces are in Iraq so that we can drive whatever we damn well please?

    I think it is very unwise and short sighted appealing to uninformed peoples emotions to propose a gas tax holiday during the peak summer vacation months supported by John McCain and now Hillary Clinton.

    When I sold new and used cars for 8 years it amazed me how the government gave tax incentives to business owners who purchased vehicles that had to meet certain weight limits. Yeah! Some businesses and farmers need those heavy duty trucks but there were other customers who reluctantly purchased big SUVs to get the credit when they wished the incentives would apply to more fuel efficient cars.

    Unfortunately many customers think that SUV’s are safer than Minivans for their families but Minivans for those that need the utility are more fuel efficient and safer than those big thirsty SUVs but it was a hard sell for those that would’nt be caught driving a minivan.

    These price increases in gasoline have been long delayed and now hopefully the law of supply and demand will help change peoples behavior towards conservation.

    My two cents,

    Miranda

  10. By Stephen, (Bianchi forever!) at 1:32 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    Interesting observations! As an avid cyclist and conservationist, I find it less than amusing that there the incentives to drive hybrid/green cars/trucks are just so lame. Even the MN 2020 standards are lame, 25% of all energy should be “green” by 2020. This is just for MN. I dont know what the CA standards are? But hey, I can just imagine many other states dont even have a 2020 standard? Or if they do have a standard, it is less than 25% by 2020.

    I am originally from Australia. Fortunately, the people of Australia fired Howard and elected Rudd who immediately signed the Kyoto Protocol. The irony is that Kyoto standards by themselves dont even go high enough, which would suggest that governments whether state or federal can do and should do more.

    Gas taxes are prevalent in most western democracies. In many of these countries, there is the “horizon” principle, stating that each oil well, has certain “horizons” and as such the revenue of sale of these “horizons” goes to the commonwealth, (i.e. the people). This is the same as a gas tax and is then used in a specific budget to spawn and invest mass transit and alternative uses of energy, such as biomass and not just expensive corn based “ethanol” which has the effect of driving up commodity prices and making it even more expensive for poor people to eat.

    Bianchi forever!!!!!!!!!!!!!!!!

  11. By yea right at 2:09 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    Doesn’t the fact that China has increased it’s demand six-fold have something to do with the record cost of oil? The cost of gas in Europe has been high for decades, not because they drive big cars, but because they couldn’t compete against the demand from the United States (and the lovely taxes). Now, we are in the same position vis a vis China.

  12. By Smithers at 2:15 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    Doesn’t the fact that China has increased it’s demand six-fold have something to do with the record cost of oil?

    Sure, some. But even with a six-fold increase the USA is using 5 times more oil than China.

    The cost of gas in Europe has been high for decades, not because they drive big cars, but because they couldn’t compete against the demand from the United States (and the lovely taxes).

    More the taxes than the demand. Europeans have taxed their citizenry into developing habits that require less fuel. They keep the taxes high to keep fuel costs high to keep Europeans from developing bad habits.

  13. By checkbook at 2:18 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    I am in favor of raising taxes on gas (to increase price thereby lowering demand, hopefully) and using that $ to pay for improving currenty transportation infrastructure as well as developing new. I really don’t get the arguments against doing this; they strike me to be almost painfully myopic. If Clinton is jumping on board with this proposal of McCain’s, it’s really disappointing and it shows her perception of her place in the dem’s race.

    If our goal is to decrease dependence on “foreign oil” (why it can’t be just OIL, I don’t know) why offer a tax-break to increase consumption and demand?

    Are people paying attention?

  14. By checkbook at 2:22 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    Europeans have taxed their citizenry into developing habits that require less fuel. They keep the taxes high to keep fuel costs high to keep Europeans from developing bad habits.

    Man, we really look like pussies in comparrison. Or children, with our innate sense of entitlement.

  15. By Smithers at 3:01 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    If our goal is to decrease dependence on “foreign oil” (why it can’t be just OIL, I don’t know) why offer a tax-break to increase consumption and demand?

    Agreed. The term “foreign oil” is just a canard used to blame dirty foreigners for our own bad habits.

    There should be no tax break to continue bad habits.

    Man, we really look like pussies in comparrison. Or children, with our innate sense of entitlement.

    Yea, but we are all free and crap unlike those dirty commie foreigners.

  16. By Bike Bubba at 4:59 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    Actually, Europe has fewer restrictions on their vehicles than the USA–especially diesel and mileage. They have no CAFE, and don’t regulate diesel out of existence like the EPA does. So in that sense, they are freer than we are.

    I wouldn’t support $4/gallon taxes on gas unless they’re assessed on buses and other forms of transit, too, though. I’ve done some quick calculations, and it’s not altogether apparent to me that buses and light rail are more efficient than vehicle traffic at all.

    To wit, have you ever seen a calculation of “BTUs of fuel used per passenger mile” for transit vs. driving? Actual usage–not the best case of a full bus, but actual usage that describes the fact that outbound is empty in the morning, and inbound is empty at night?

    Post on it if you have–I’m guessing that a fair portion of bus and train routes actually use more energy than driving.

  17. By Jason L at 9:27 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    I was talking about taxes with my good buddy Tim P and we think that the McCain/Clinton gas tax holiday is a great start to help solve all of our problems. The consumer saves mad coin, roads go into disrepair faster, maybe a few more bridges fall. Remember if you can’t cross the river that means less driving for you. A master stroke of long term thinking, the only better thing would be to permanently do away with all taxes on gas, why should we pay the governemnbt for something that costs so much in the first place. One more thing, when can we start drilling ANWAR? George says that would have cured high gas prices today, if we would have only had the forsight to approve drilling back in 2002.

  18. By Smithers at 10:17 pm on Apr 29, 2008 | ReplyReply directly to this specific comment

    One more thing, when can we start drilling ANWAR?

    Post on that tomorrow morning.

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