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Eight Dollar Gas

One of the recent proposals put forth to address the condition of four-dollar-a-gallon gasoline, was to find a way to make it cost more. Some folks seem to think, if I understand the strategy, that making gasoline more expensive will force folks to stop using it. That is a singularly poor notion, however.

Gasoline is principally used to power motor vehicles, but there is also the secondary effect that gas prices affect freight and shipping costs, so inflation is also affected. With very few exceptions, people need motor vehicles to get to work and to do their jobs. It is true that people who can do so will be more inclined to take public transportation, but there are problems with the assumption that the majority of people will do so. In the first place, public transportation does not generally have the infrastructure to accommodate the majority of the population. This is why there are a limited number of bus and train routes and a limited number of transportation options. For example, a few years ago my company had an office near north I-45, while I lived in Southwest Houston. When we were moved to that office, I had to stop riding the bus to downtown and drive myself to the new office, because there was no bus route that would get me to and from work. This was deliberate by the county, because the county managed a network of toll roads which most drivers going that way used, and letting buses carry folks would cut into toll road revenue. As a result, the Harris County Toll Road Authority and the Metropolitan Transit Authority worked together for their maximum financial gain, rather than to meet the needs of Harris County and Houston's working population. No one should expect future considerations and plans to be any different.

But, just for the argument, let's say METRO wants to do the right thing and set up a comprehensive network for travel. What will doubling the price of gas do? Raise bus fares, of course, and so will opening up all those new routes and buying the new buses to serve them, and building all the stations and depots needed to service and maintain the buses, plus hiring and training all the additional employees to maintain and drive those buses, and to handle all the traffic. Fares will double or triple, count on it. This is because historically, public transit systems have lost money and cities and counties will not be willing to accept the size of deficit the larger fleet will promise. What will happen, in a practical perspective, is that growth of the bus fleet and route numbers will not rise to the level where the majority of the public can make effective use of buses; just as has always been the case, most working people drive themselves to work because the politically correct solutions are not practical. In many cases they are not even practicable.

Public transport having been shown to have no more substance than an Obama resume, I now address the suggestions that drivers would shift to smaller, more efficient cars, or invest in hybrids, electric cars, or the like. The problem there is that such suggestions ignore the reasons for the popularity of SUVs in the first place. I, for example, do not trust the durability of the smaller cars, nor do I intend to risk my wife in a vehicle which cannot protect her from serious injury in an accident. That is not to say that we drive the biggest cars. I drive an Accord, my wife a CR-V. In both cases the cars are strong enough to protect us from serious injury in the event we have an accident, they are solid enough to avoid damage from the rough Houston roads, and they have suitable visibility, horsepower, and maneuverability to avoid accidents and dangerous situations in the first place. On the other side of things, I have seen the Prius, for example, and no sane driver would use one in traffic, let alone buy one and chance putting his family in it. No one would drive a Fit, a Scion or a Versa. The scooters, electric cars, and the like are even more risky and dangerous, and it is a poor mind which considers economy ahead of safety.

-- continued --

The considerations also fail to consider the force of habit. During the 1970s, a lot of folks changed their ways when the first Oil Crisis hit, and that crisis was a lot tougher than what we face now. But things work in cycles, and if 50-cents-a-gallon gas was no more, the prices did go down for a while and the supply became easy again. That will happen here; no one should expect 2-dollar-a-gallon gas again, but prices will go down and when they do, opinion will shift from the panic being sold by extremists. Conservation and sensible engineering will always be good ideas, but folks just will not agree to be held hostage by an economic condition, at least not in America. No one will like higher prices, but folks will weigh the price against their options, and a lot of them will pay more because the alternative is still not acceptable.

You see, gasoline replaced coal and other options all those years ago, because it was cheaper, cleaner, and more convenient. For a new paradigm to replace the gasoline-driven engine, it will be necessary for the new product to be clearly superior - the notion that political pressure will be sufficient to change transportation modes across the demographic is patently absurd, and fails from the beginning presumption. Effectively doubling the pump price of gasoline through artificial attempts to affect demand for gasoline without providing an effective and attractive alternative fuel source, cannot fail to produce disastrous results. As has been discussed above, artificial manipulation of fuel prices would be incendiary in terms of inflation, would increase unemployment and slow construction and commercial growth, would make American exports more expensive and so increase the trade deficit, and provide a valid source of intense resentment against the political agents who introduced and supported the plan. There would be grounds for legal action against Congress, the reason being that government manipulation of the market for the express purpose of harming the interests of the general population would be patently unconstitutional. The only means by which the leaders of the price fixing could avoid legal consequences for their actions, would be to make gasoline a substance illegal to have in personal possession and use for personal reasons.

Given these rather obvious reasons why doubling the price of gasoline cannot possibly help the nation, one may wonder why anyone would still advocate such actions. The answer to that lies in one simple question - doubling the price of gasoline would produce huge amounts of additional revenue, but who gets all that money? The answer, plainly, is the government, playing a Robin Hood but in real life an agent of its own greed and hypocrisy. After all, given recent behavior by Congress, does anyone believe that they would allow Oil companies to keep the profits they earn? Does anyone think that Congress, having refused to cut its already swollen taxes on gasoline, would hesitate to seize the additional funds from forcing higher prices? And the only way to do that, would be for Congress to effectively nationalize the oil industry, everything from car gasoline to heating oil, to plastics to ... you get the idea. Congress making sure it gets the first slice of the pie ... and the second ... and the third. This plan, at its heart, is poorly-disguised Socialism, lies and hypocrisy painted over with a scheme to blame working people for the greed of a politically correct Nomenklatura.


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Comments (19)

I wouldn't denigrate some o... (Below threshold)

I wouldn't denigrate some of the smaller cars without doing research first. The Versa, for example, has a higher safety rating than the Accord for the 2007 model year.

Jonathan is partially corre... (Below threshold)

Jonathan is partially correct. The Smart Car, for example, performed very well in front and side impact crash tests -- it is so small, it essentially bounces off anything it hits.

The problem, though, is what happens if your Smart Car is rear-ended or collides head-on at a high rate of speed with a commercial truck or a large SUV like a Cadillac Escalade. In those cases, you would be squashed like an insect.

Yessir,let's run the pri... (Below threshold)

Yessir,let's run the price of gas right on up to $15 a gallon--THAT'LL conserve oil.

Of course the price of everything else will skyrocket, but hey, we'll be saving the earth, no?

The thing that almost EVERY... (Below threshold)

The thing that almost EVERYONE misses with crash ratings is that they're all relative to the size of the car.

So sure, that Smart Car has a good crash test rating - when you compare it to other cars in its (really tiny car) class. However, the various safety folks remind you (in small print) that each rating is only versus other cars of about the same weight and size.

So no, the subcompact Versa and the compact Accord are not comparable in "how many stars" they get.

This is why you're better off in a three-star 6000 pound luxury car (in general) than you would be in almost any of the four-star subcompacts.

I'm certainly opposed to an... (Below threshold)

I'm certainly opposed to any plan that would increase fuel prices or taxes. But there are also some real drawbacks with alternative transportation as well.

Here in Portland, Oregon there has been a skyrocket of crime around bus stops since more people have been riding mass transportation, where assaults, robberies, knife fights and even shootings are now becoming more commonplace. Bad guys know that people with some money or credit cards are riding the bus to the office, and taking advantage of the situation.

I personally like motorcycles and scooters myself, and I bought a higher performance CPI Sport model back in June which gets 50mpg and can go 45mph, but can easily go 58mph with some aftermarket performance parts available. But I did have a lower performance 94 mpg Chinese model before that which was perfectly good transportation as well. Motorcycle sales of all types are up about 140% over last year with this gas price crisis, and many wholesalers are simply out of most stock right now except for the really dorky looking stuff.

There are however some real safety concerns with motorcycles of all types. One is that they are not as stable any four wheel vehicle, however there is an $8,000 Piaggo model which has three wheels, and a complex electronic suspension system which looks like Batman's bike that is quite stable. Another problem is that wet weather or sudden hail can make any two wheeler real unsafe in a hurry. I had a bad crash in April with my cheaper Chinese scooter and got thrown and rolled about 20 feet on hard pavement when I suddenly skidded on some some sudden hail in 50 degree weather slowing up for a yellow light in traffic. You can go down in a hurry on motorbike with no real warning. YouTube has some pretty graphic videos of some fast fatal accidents on motorcycles. You don't have any seatbelts or airbags on motorcycles, so it's best to wear a full face helmet and body armor because you never know when something may happen.

A two-wheeler will never be as safe as a car or truck, but they get high mileage and are a real thrill to drive if you have the balls to go out into traffic on them and drive at city traffic or even freeway speeds. And Motorcycles are way cool too, and some girls dig them. Some girls like the outlaw image of some bike guys. However, most bike guys I know including the hardcore Harley guys are fine folks when you get to know them, and most would stop to change a flat tire for a lady or other good behavior. And most bikers have a real sense of brotherhood and respect for each other. There are a number of motorcycle or scooter clubs that allow for friends to ride together or to meet new folks as well. So motorcycles can become a social thing as well.

Some folks like bicycles. However right here in Portland there has been a road rage incident everyday between a bicyclist and a motorist this week, mainly because around 90% of bicyclists do not obey traffic flow or signals, and generate motorist outrage. And another problem is a large number of bicyclists are juvenile personalities who often ride in a reckless manner such as popping wheelies, riding hands free, blocking traffic or other childish nonsense, and create fights when a motorist honks at them for such juvenile conduct while riding. Unlike motorists who must obey the rules of the road and be licensed and insured, many bicyclists are simply not really fully adult or responsible personalities. In fact it is rider error, not other vehicles that are the main cause of most bicycle accidents. A bicyclist is far more likely to injure or kill themselves by more their own poor riding habits than any other accident cause. Which begs the question whether some sort of rider education or licensing would be good to reduce accidents among adult bicyclists who generally choose much faster bikes than would some grade school age child. A 15 or 20 speed bike is capable of some fairly high speeds.

Even worse than bicycles are some of those awful econobox cars. However, if gas becomes too expensive, you know that we'll be seeing more of that stuff on the streets.

I was going to warn you DJ,... (Below threshold)

I was going to warn you DJ, because you mentioned scooters, Paul was going to show up. Alas, I'm too late.

Okay - gas is expensive, an... (Below threshold)

Okay - gas is expensive, and the price is forced up via taxation or whatever to insane levels to FORCE me to get something more fuel efficient... but my car (which gets 20MPG around town, about 30 on the highway) is paid for. Has been for about 6 years now...

If gas goes up to $8 a gallon (which might be Pelosi's ultra-double-top-secret energy conservation plan) I go from a per-mile cost of 20 cents a mile for gas to 40 cents. That's a doubling of $200 a month for gas to $400, seeing I drive about 1000 miles a month. I can tolerate it, but I'll be cussin' the idiot in Washington who came up with the idea, and I'll be more than happy to vote out ANY incumbent inside the Beltway whether they voted for it or not.

If I get a new car, I can expect to pay, with trade in, roughly $10-15k for a god-awful small hybrid econobox that might get 45 mpg in town.

But that gets my per-mile cost down to... let's see... 17 cents a mile at $8 a gallon, or $170 a month for gas. But I'll need a car loan, because I don't have $15k sitting around waiting for me to buy a car with it. Also, I'm not about to tap the equity in my house to get a new car. That way lies madness...

So figure a car loan - $15k, 60 months, about 6% - $300 a month.

So at $8 gas, I can either get a more efficient econobox and pay $470 a month... or stay with my current beast and pay $400. That's not a hard choice.

Alternatively, I can pay about $20-25k and get a hybrid large enough for my job and transporting my aged parents on occasion (w/wheelchair and walker) which will probably get 35 mpg in town, at a per-mile cost for gas of 22 cents, or roughly $220 a month for gas.

A larger car makes it even easier. $483 for the car note, plus $220 - I'll round it down a touch to an even $700.

So I can either cough up $400 a month to stay with my gas-guzzler, or pay much more to drive an economical car. Unless I've got my numbers mixed up (which is quite possible) it'll be a LOT cheaper to stay with my current beast.

That does it. I'm getting an oil change and some minor maintenance done on the thing tomorrow...

Living in rural NH the firs... (Below threshold)
just me:

Living in rural NH the first problem is that there is essentially no public transit system. There are a few methods of getting into the major cities, but if you live in podunk town and work in another podunk town 30 miles away you are SOL when it comes to public transportation.

Also, the problem with going to small cars is that some of us with large families don't fit in them period. And a lot of people who are most affected financially by the rise in gas prices likely aren't in a position to purchase a brand new car. We have an SUV, a small compact car and a motorcycle (we use the car and motorcycle 99% of the time right now)-but they are all paid for. We do not have a car payment and our budget doesn't have any room for a car payment, and the trade in value or the SUV would result in a car payment-and we would still have to purchase a car or truck large enough to sit 6 people.

$8 gas may be great and doable for some people, but the poorer folk in rural areas are being bitten already, and new car purchases aren't in the budget for many of them-and public transportation doesn't exist and it wouldn't be feasible for them to create one.

That does it. I'm gettin... (Below threshold)

That does it. I'm getting an oil change and some minor maintenance done on the thing tomorrow...

I think that decision is being made everywhere now. New car sales are in the tank and will remain that way until consumers see some level of stabilization in both the economy and fuel prices.
That is the most interesting aspect of this current fuel market and economy. Consumers are quietly making changes in their behavior that will ultimately have a huge impact on corporate budgets and capital spending in a way that Congress may never understand.

Fares are already being rai... (Below threshold)

Fares are already being raised in Northern Virginia because of gas prices. In order to pay for increased ridership, the price for bus trips are going up by a buck.

It basically comes down to ... (Below threshold)

It basically comes down to grin and bear it until it's time to trade for a new ride. There is no real incentive to trade vehicles solely for better mileage. Most folks can make some very minor changes to their driving patterns and save 10-20%. Your fuel bill is still higher than two years ago but your increase doesn't have to match the increase in gasoline.
I've always been a bit skeptical of the SUV as an improvement to safety. The deadliest type of accident is a rollover and the higher center of gravity of those vehicles makes them more likely to roll. They also swerve like a cruise ship in emergency lane changes.

HughS -Cong... (Below threshold)

HughS -

Congress is like a man with a hammer. Every problem can be solved through whacking it with legislation.

This is one case where they need to let US decide what we're willing to do, and do without.

I know I'm weighing my own non-work trips against $4/gallon, and am cutting back and combining trips a lot. But I don't want the government to come in and force people to cut back - either through insane taxation or a 55 MPH speed limit. It didn't work all that well the first time - and now there's a lot more people on the road and fewer cops.

"...gas prices affect freig... (Below threshold)

"...gas prices affect freight and shipping costs, so inflation is also affected."

That turns out not to be the case, DJ. Inflation is a phenomenon that raises the general price level; it can only occur if the supply of currency and credit is expanded. An increase in the cost of gasoline will put upward pressure on the prices of goods that are moved by car or truck only. It will have no direct effect on other goods. In fact, its indirect effect on the prices of other goods would be to depress them, since (in the absence of currency inflation) purchasers would have less money to spend on those other goods.

It's vitally important that Americans realize that inflation is a monetary phenomenon -- that only the agency that controls the money supply can bring it about. That would spike the wheels of those trying to blame corporations, or capitalism generally, for inflation.

Francis -Name one ... (Below threshold)

Francis -

Name one major mode of transportation that doesn't use petroleum products.

Cars and trucks? Gas and diesel.

Trains and ships? Diesel fuel/bunker oil (a lower-grade diesel.)

Aircraft? Jet A-1, a refined kerosene.

ANYTHING that's moved for buisness is moved through petroleum products. Increase the price of those, and you increase the embedded costs in the product.

In what I quoted, DJ was sp... (Below threshold)

In what I quoted, DJ was speaking specifically of gasoline, JL -- and I was speaking specifically of inflation, as opposed to sector price increases. Not to mention that in an information economy, as ours is increasingly becoming, there are products that don't have to be shipped in the conventional sense, because they're non-material.

"Keep thine eye fixed upon the doughnut, lest thou pass all unknowing through the hole." -- Me.

One important fuel saving t... (Below threshold)

One important fuel saving tip I should have mentioned above is that if every motorist would switch all of their vehicle's lubrication over to a high grade synthetic oil such as AMSOIL, it would cut their fuel costs by as much as 10%, besides protect the engines from overheating or head gasket failures. Many automobiles will someday experience a head gasket failure due to the aluminum design of the head. This is especially true if you own a bimetal engine(one that features an aluminum head, but a cast metal engine block). Cast metal and aluminum heat and cool at different rates, which creates enough friction and damage to the head gasket material that it can result in failure at between 70,000-150,000 in many automobiles. A top grade synthetic oil like AMSOIL allows the engine to run many degrees cooler, greatly limiting this sort of damage to an engine due to heat.

AMSOIL works so well that I actually lost all of my oil in my crankcase on the highway due to some road construction debris that punched a hole in my oil filter, yet I was able to drive many miles to my home with no oil in the crankcase because the AMSOIL kept a layer of lubrication on all the vital engine components and prevented engine failure. I repaired the damaged oil filter at my home and continued to drive the same car for thousands more miles for the next few years. Try that with normal oil, and your engine would seize up on the highway leaving you stuck within about one mile or so.

My greatest fuel savings from AMSOIL ever, a scooter I used to own that went up from 83mpg up to 94mpg just by using AMSOIL in the four stroke engine and the CVT transmission.

That's another great fuel saving hint. Look to buy an automobile that uses a fuel saving CVT transmission. These types of transmissions can save you as much as 20% in fuel costs. You have to wonder why every car doesn't use this great design.

If you have a car that won't pass your state vehicle emissions testing, try putting AMSOIL in the car. In nearly every engine it will cut hydrocarbon(oil) blowby that gets past the piston rings and increases pollution levels. Even in two-stroke engines, AMSOIL products burn much cleaner. A normal two-stroke 150cc motorcycle engine unfortunately puts out as much hydrocarbon air pollution per one mile as a big city bus with 300hp diesel engine does during one hour of use. So anything that cuts this pollution benefits the environment.

I've tried many oils in many cars and motorcycles I've owned, but I haven't found one that puts out as much power or saves as much gas as AMSOIL does. I never found Royal Purple, Mobil 1, Castrol Syntec, Quaker or any other brand to match AMSOIL for either power or fuel economy. AMSOIL simply saves gas and gives more horsepower than any oil I've ever used. You might also want to try E3 sparkplugs as well. These put out more electrical spark than any brand ever tested so far and save gas and increase horsepower as well. Cheap sparkplugs foul or don't always run clean and waste gas and power both.

While $8.00 gas with taxes ... (Below threshold)

While $8.00 gas with taxes may not affect all transport we know the Gov will also increase tax on all other fuels. Also windfall profits on Oil will increase price on all those petroluim based products.

This will increase the cost to produce package and transport goods.

So I would say yes it is all related.

Look at increased foos prices from ethanol and high gas prices

"..I was able to drive ... (Below threshold)
Les Nessman:

"..I was able to drive many miles to my home with no oil in the crankcase.."

Why in the world would you continue driving if you lost your oil? Best thing to do is to pull over and shut off the engine asap.

The following is not intend... (Below threshold)

The following is not intended to be completely serious, but nevertheless partly true for my neck of the woods:

Mass transit ANYTHING where I live is literally non-existent and likely will be for many years to come (not including school buses of course). You just can't get a bus of any kind up in the backroads of the mountains, not without a death wish anyway, even the school buses have their limits, a lot of kids walk to their pick up location (yup some kids will still be able to tell that "when I was kid I walked 3 miles..." story twenty years from now). There's no train, no subway, no taxi service, and no trolley. Not even a covered wagon or stage coach. (sorry couldn't resist)

Scooters...multiply that deathwish by ten thousand. Ever hit a 'possum on one of those things? They're okay inside our teeny tiny town, but considering 'town' is the size of a city block, you'd save even more gas by parking the scooter and walking. The worst thing you'd have to fear by walking is the local dog or other various wildlife associated with the mountains.

I've also wondered where one is supposed to put kids, especially a baby, and or groceries for a family of four on a scooter???? Do I leave the kids at home and bring groceries back one bag at a time...now that would be wasting gas!

I don't think human services would be happy with me for leaving a baby at home by itself or riding it around on a scooter either. My Toyota Camry will have to suffice, or my Oldsmobile Cutlass station wagon (AKA The TANK)....and I still have to drive an hour each way to work no matter what I drive.






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