Locally, it looks like gas just poked past the $2.00/gallon mark. While possibly not record high when allowing for inflation, it’s certainly a psychological barrier. I’m wondering what the effects will be. (This could go in Great Debates as well, but I’d rather keep the vitriol out of it.) And realistically, to me, the incremental cost is pretty small – I fill my gas tank once every ten days or so, and it’s costing me an extra 6.00 or so. So roughly an extra $4.00 week. I’m probably at the low end of gas usage
b) Economic figures aren’t going to be too sporting for the spring/summer season. Higher gas prices means that everything’s more expensive. So…if a few hundred dollar tax rebate means a boosted economy, then having to spend those few hundred dollars on fuel-related costs means probably a cooling economy.
c) Following from (b) – the current Administration is in deep trouble. Screw up American foreign policy for the next N years, and a vast contingent of the voting public is going to hit the same levers they always pull. Screw up the price of gas (even if the Administration has no real control over it) and my guess is that head’s are going to roll.
d) What else? Maybe good news for makers of hybrid cars? Certainly more incentive for people to buy them.
So, what else am I missing? Is this a big deal, or a minor glitch in the works?
In the long run, I don’t think this will have too large an effect. Look at the 70’s and the “Gas Crisis” (that never really was a crisis). Hardly noticeable. The market will make small adjustments and pretty soon, its “business as usual”.
Short term: Chaos! Poor summer for travel. I’m not driving to Indy this year. I may drag out the motorcycles to commute to work again. But probably not.
Many of my friends with poor fuel economy vehicles drive much less often.
I am glad I have a car that gets ~34 MPG. I do still hate having to put 20 dollars of my money into my car every week. (I know, many people probably spend 3 times that, but this is the reason I got a good gas miliage vehicle, I’m not fortunate, I planned ahead)
Hmmm. I seem to recall that the gas crisis pretty much launched the compact car in the US. All of a sudden, the small crappy economical Japanese import became the super-reliable economical Japanese import. And the US big iron became a drag on the market. And the compact cars stayed popular until at least the late 80’s when the first SUVs were introduced. (And those first SUVs were tiny compared to today’s models.) Granted, the size and power of the cars kept gradually increasing.
However it’s true that we don’t have an actual gas shortage (except maybe in isolated places). So it is possible that someone who feels like ponying up for a $45K vehicle might not mind the accompanying gas bills. This is why I think the $2.00/gallon price is going to be more psychological in effect.
I speculate that higher gas prices means the cost of just about everything else will go up. Most products and services rely on distribution, which of course is part of the overall cost of most of the things we buy and use every day.
The travel and tourism industry will also likely suffer. Who wants to go on that big summer road trip across the U.S. when every fuel stop along the way is going to cost so much more?
There will also likely be increases in fuel thefts at the pump and probably from individuals who don’t secure their car’s fuel cap. I recently read a story in the newspaper about more drive-offs occurring at many local gas stations. I certainly don’t advocate such theft, but I’m also not too surprised, either. Either people are doing it out of protest or, quite simply, they can’t afford it anymore.
Umm, the 1970s had the worst economic stats since the Great Depression. Inflation, recessions, unemployment. (Actually, peak unemployment was worse under Reagan…)
If you plot a curve of inflation adjusted oil prices and the US economy 6 months later on the same graph, they match surprisingly well.
In short, we were just starting to barely inch out of a nasty recession (employment wise) and now we’re going to go into the toilet Big Time unless things change very, very fast.
BTW: There was no tax cut. You just got a tax loan that you have to pay back with interest. It’s called the national debt.
Whenever I go somewhere new I get lost. Last week I had the worst time finding my new doctor’s office and I figure it cost me about fifty bucks. I was so late I had to reschedule and drive back, all 180 miles, the next day. My little quirk doesn’t seem so freakin’ cute these days.
If your looking for the specific psychological aspects, it might be worthwhile looking at the case of Australia 2 years back where gas prices just edged over $1.00 per litre. I didn’t bother looking into it much at the time but I’m sure there would have been a lot written about it in the local press.
Don’t forget heating oil costs. If the price of crude doesn’t go down by winter there is going to be a premium on large fat dogs. memo to self: remember what happened the last time you made that wise-crack, there is a reason you’ve been sleeping by yourself since 1977.
The residents of California dancing in the streets, celebrating the 20-35% drop in gas prices.
Hopefully, the sales of hybrid will get a boost (which needs to happen anyway).
I must say, I do love my 93 Corolla. I can drive from here to Riverside (about 400 miles SSE) filling up once. Round trip to Santa Cruz on half a tank.
Poor summer for travel. I’m not driving to Indy this year. I may drag out the motorcycles to commute to work again. But probably not.