Hurray for High Gas Prices!

[Aeson]

Originally posted by Victor Galis
Well if they can't afford to work those jobs anymore then the available labour pool will shrink until wages rise. Or really until the farm lobby does something about it.

You don't seem to understand farm labor. It's already a tough job with very little compensation. Wages aren't going to rise unless minimum wage is increased. Because that's what they get paid for the most part, and they only get paid that much because government forces employers to do so.

Not to mention that other jobs are becoming fewer and fewer relative to the population. Even if they had the qualifications to work other jobs, the competition for those jobs means most wouldn't be able to make the transition (and those who did would be displacing others).

The fact is that the poor are those are being hardest hit by commodity inflation, and that people don't really have any recourse from it while the economy is contracting. (Which itself is exacerbated by the increased energy costs.) At best someone can displace someone else. Essentially climbing a shrinking ladder.

Not really. If some move away, the incomes of those who stay shoot up.

That doesn't follow. Have you ever visited small towns where people have actually moved away in any numbers for economic reasons? When people bail out on the town it drags down the local economy even further for those remaining.

Everyone obviously can't move away at the same time.

Which is what you're ignoring to make your claims that people can just move away and so it's not an issue. It has to be an issue for someone, so your comments about "just move away" obviously fail.

On the contrary, it will lead to production being located where it's easiest and cheapest including transport costs.

You stated that we were set up better now to deal with higher transportation costs and so prices weren't going to rise. That is clearly not the case. Prices have been very low due to exploiting cheap labor in developing markets, and the prices we pay will rise either way now. We've set ourselves up that way because transportation costs have been relatively insignificant. But they are increasing rapidly.

To expect the entire world economy to re-distribute labor centers during a recessionary environment is ludicrous. The capital necessary for doing so isn't available right now.

But even if we ignore that, there is no way that increased fuel costs can help prices stay low. I don't care which way you go to refute yourself, moving from cheap labor, and/or paying higher transport costs... both refute your position.

When you factor in the fuel savings they're getting more affordable.

No. You are ignoring the financial position people are in right now. You can't just snap your fingers and instantly have the capital necessary to make the transition to more expensive technology.

We have an already bad situation because of the housing/credit bubble, and a commodity boom is only going to exacerbate that problem. People don't have the income to afford to make the transition to more ecologically sound (and more expensive) options. They also are much less likely now to be able to qualify for credit to do so.

It's a terrible time for rising commodity prices to occur. Sure, in the long run it's cheaper to be efficient... but when you're priced out already, it doesn't matter, it's not an option.

Part of that is the incredibly terrible value of the dollar.

Which is what you're cheering on by cheering on high oil prices. At the end of the day, the dollar is worth what it can buy you, and when commodity prices soar, that value is becoming less and less.

[Imran Siddiqui]

Originally posted by Aeson
You can't just look at people trading in their SUV's for better gas mileage cars in a vacuum. You are ignoring that your method for "forcing" people to do so is also disallowing other people to make their own improvements. I am simply pointing out what you are not considering.

I'd imagine that overall, the incentives for making people purchase more petroleum efficient vehicles will outpace the gains by people who are disallowed to make their own improvements.

Slowing the economy will not help people do so. And there are some who would (like to) do so. Again, showing how your preferred method doesn't really lead to the solution(s), and can actually hamper the solution(s).

The ONLY way to get people to change is to hit them in the pocketbook. We can try tax breaks on solar panels and other things, but they just won't work when energy prices are low. Our problems stem from a complacency that came about due to low energy prices.

A good insight as to why it's not really an economic phenomenon. We need to change what is "cool", not what is economically feasible. There are people who couldn't afford huge houses or shiny toys... and it didn't stop them from trying anyways.

And how exactly does the government go about making something "cool"? And no, it has to be a question of economics. The higher gas prices have led to massive increases in city public transit and less buying of gas guzzling SUVs and more of efficient cars, like Toyota Camry/Corolla, Honda Civic/Accord, etc.

It's going to increase the cost of alternate energy as well. While undermining the average person's ability to pay for it. A double whammy.

While the demand for alternative energy may rise as a result, I think it will refocus the average person's values and what they need to spend on.

It's very bad timing. A recession, which is looking like it would be an "L shaped" one already, is bad enough. But adding commodity inflation into it, and while technically you're correct that not everyone will be beggars... certainly a lot more economic slowdown will occur than would have happened otherwise.

While true, the $1 increase would go to the government and if they spend that, it could help people and help get the country out of the recession.

I mean this isn't, IMO, a simple oil spike. This is where the commodity price of oil should have been all this time. Gas was way cheaper than it should have been for years on end. Now we've reached a new equilibrium... the era of "cheap" gas is over.

Though, of course, the weakness of the dollar does have a great deal of blame for how high it is now. IIRC, a study said that if the dollar was as strong as it was in 2000, a barrel of gas would be going for $90/barrel instead of what it is now.

[Ramo]

$4/gallon gas is apparently roughly what it takes to incentivize a change in peoples' behavior. This was unheard of, but it's actually happening. Fuel efficient cars and mass transit are actually becoming a lot more popular. We've got infrastructure issues, but we're finally starting to address them. Urban areas in the West and South are getting onto the light rail bandwagon (Houston, for instance, recently began a large light rail expansion). I think we're likely to see major federal investment in this sort of thing (use a combination of gas taxes, a carbon tax, and auctioning carbon credits to fund municipal mass transit).

[Aeson]

Originally posted by Imran Siddiqui
The ONLY way to get people to change is to hit them in the pocketbook. We can try tax breaks on solar panels and other things, but they just won't work when energy prices are low. Our problems stem from a complacency that came about due to low energy prices.

Solar panels and wind turbines were already cost effective for a lot of homeowners. Here in CA it was possible to get them virtually free after tax breaks in fact. Even without tax breaks they can pay themselves off in just a few years.

And how exactly does the government go about making something "cool"?

Government doesn't have much to do with it, though it can help provide incentives for technology which can. Consumer products like the Tesla roadster certainly can change the impression of the little 3 wheel bubble electric car. Hybrids and even some "golf cart" electrics are becoming hip in CA. But they cost more, sometimes a lot more, and need a stronger economy to really have a chance to take hold.

A true solution would be nuclear and solar power plants and electric cars, or have the plants producing hydrogen to fuel cars. It also doesn't require the difficult thing, which is to change people's way of life. It would take a strong economy to build the infrastructure necessary though.

Undermining our economy to hopefully change people's way of life is not as good a solution. Especially not when it is resulting in food riots in various places around the world. And we're just getting started... Goldman is predicting $200/barrel, and the increase has been so rapid that the associated costs have just started taking hold. (DOW for instance just recently raised their prices by ~15% across the board.) This has the potential to be extremely ugly.

If we were ready to make the switch, then yes, higher prices to force it would be a good thing. We were progressing slowly towards it, but we weren't to that point yet, and a lot of people are going to suffer tremendously because of it.

If we were in a stable economic situation, then yes, higher prices to force the change would be a good thing. But we're not. We are faltering already, and there's a feedback effect because of it.

It's just very bad timing for it. Not something anyone sane should be cheering on.

And no, it has to be a question of economics. The higher gas prices have led to massive increases in city public transit and less buying of gas guzzling SUVs and more of efficient cars, like Toyota Camry/Corolla, Honda Civic/Accord, etc.

I haven't said this effect doesn't occur, just that it brings with it negatives as well.

I think there are better ways than to take an already struggling economy and strangle it with high commodity prices.

While true, the $1 increase would go to the government and if they spend that, it could help people and help get the country out of the recession.

As I've said a few times already, a tax is different than a price increase, and I'd support an increase in tax (but not right now... it should be done when the economy is healthy enough to support it).

I mean this isn't, IMO, a simple oil spike. This is where the commodity price of oil should have been all this time. Gas was way cheaper than it should have been for years on end. Now we've reached a new equilibrium... the era of "cheap" gas is over.

No. Demand for oil has increased in developing markets, driving up the price. And...

Though, of course, the weakness of the dollar does have a great deal of blame for how high it is now. IIRC, a study said that if the dollar was as strong as it was in 2000, a barrel of gas would be going for $90/barrel instead of what it is now.

The weakness of the dollar certainly is a big part of it. This becomes much clearer when you look at how many other commodities have very much mimicked the rise in price of Oil. It's not like they were all artificially inexpensive before, it's that our economy is weak, and our dollar is being thrown under the bus to try to save some fat cats. Basically making everyone else pay for their mistakes.

That's perhaps the strongest reason not to cheer high gas prices... because they are in large part a result of tremendously stupid economic policy.

[Imran Siddiqui]

Solar panels and wind turbines were already cost effective for a lot of homeowners.

And how many people have them on their houses? Not very many at all, I'd wager.

though it can help provide incentives for technology which can

Tax breaks don't seem to work. On the other hand, high gas prices are making the strides that tax breaks have been trying so hard to do.

If we were in a stable economic situation, then yes, higher prices to force the change would be a good thing. But we're not. We are faltering already, and there's a feedback effect because of it.

It's just very bad timing for it. Not something anyone sane should be cheering on.

But the faltering isn't all that horrid. Sure, it's can be said its a bad time for it, but without all of the other stuff in the economy, we wouldn't have seen the positive effects that have occurred as a result of high gas prices. As stated, fuel efficient cars and mass transit are becoming much, much more popular... and if prices stay high, it can actually convince local governments who have been resistant, to invest in mass transit (counties in the metro Atlanta area who were against spending on bringing train service to their counties are now considering it).

These economic situations allowed us to see all the benefits of higher gas prices... or rather gas prices that more accurately reflect the negative externalities of low gas prices.

In essence, when times are good, people WON'T think about raising gas prices by tax because of costs associated with congestion and the environment. They'll just like their low gas prices. So, while it may not be the best time for a sharp gas increase, it may have been the only time it would happen, and the only time peoples' attitudes would have changed. And the changes made now, during what is perceived as a time of "crisis" will do good things later.

When times are good, there won't be as powerful an incentive to build more public transit or increase CAFE standards. Today there is, and that will be good for the future.

So, yes, I think there is a good reason to cheer high gas prices, even if people suffer, because changes that occur today will benefit all of us in the future, regardless if people ignore future changes when times are good (which they will).

Basically, real change seems only to happen during a perceived crisis.

[Krill]

Do people here actually understand how a hydrogen fuel cell works?

[Aeson]

Originally posted by Imran Siddiqui
And how many people have them on their houses? Not very many at all, I'd wager.

Which actually goes against your argument. It already was economically better to do (with the tax breaks), to the extent that $1 in gas really doesn't compare, but it was resisted because of more superficial concerns.

Essentially people have either through ignorance of the options, or superficial concern, already chosen to take the hit to the pocketbook. Perhaps at some point they will break, but that's going to be bad for everyone, even those who made the proper choices, or would like to.

Tax breaks don't seem to work. On the other hand, high gas prices are making the strides that tax breaks have been trying so hard to do.

You mean tanking the economy? I didn't know that was the intent of tax breaks (though I wondered about Bush's cuts...)

I still don't see people rushing to put solar panels, solar water heaters, and such up on their roof. I don't hear the clamoring for nuclear and solar plants being constructed either.

But there was an undercurrent forming. More and more energy efficient building was taking hold. Technology advances were bringing costs down. Early adopters were becoming a bit more common. It would be a shame to lose that and take unnecessary steps back economically, and weaken our advance technologically.

But the faltering isn't all that horrid.

It's just getting started. And it's already horrid in some parts of the world. Ignoring the suffering of people just because they aren't your nationality is sick and wrong. But you cheer on their starvation.

Switching some people from SUVs to compact cars or even public transport, just doesn't make it right. A tax could do that without causing the global repercussions anyways.

In essence, when times are good, people WON'T think about raising gas prices by tax because of costs associated with congestion and the environment. They'll just like their low gas prices.

People aren't talking about raising gas tax now either. In fact the only real proposals have been to eliminate the gas tax for the summer, the complete opposite of what you are pretending the crisis would lead to.

Basically, real change seems only to happen during a perceived crisis.

Naw, you get knee-jerk reactions to crisis. You get stupid superficial "remedies" from politicians.

Look at the track record for our crisis management:

Terrorist attack... well, we'll invade some unrelated foreign country and get bogged down in what we already knew was a quagmire and blow ~a trillion dollars on it. (And never mind that it was similar actions on our part that lead to us being the target of the attacks in the first place.)

Losing jobs overseas... well we'll build walls for billions of dollars to keep people from getting into our country and bypassing our ethnic quotas for immigration, so they can't do the jobs no one here wants to do anyways.

Banks might fail... well, we'll cut the dollar by 1/4 and cause commodities to moonshot, letting everyone but those who screwed up suffer.

Gas prices too high... well we'll cut the gas tax for the summer. That will just solve everything. That's what your preferred candidates proposed. How does that jive with your position that there should be a dollar increase in gas tax? Right now people are hurting, but not a lot in this country. (That can definitely worsen.)

The difference between an SUV and more fuel efficient car isn't all that much when you work it out. The price at the pump is the obvious effect, but the real differences will show up later in higher prices for other goods, in combination with a weakening economy. Both of which won't clearly show the problem. When people go to Walmart and finally see the prices going up instead of down, most won't realize it's largely because of oil costs.

[Imran Siddiqui]

Originally posted by Aeson
Which actually goes against your argument. It already was economically better to do (with the tax breaks), to the extent that $1 in gas really doesn't compare, but it was resisted because of more superficial concerns.

Actually it doesn't. It shows that people respond more to the stick than they do the carrot in this area.

You mean tanking the economy? I didn't know that was the intent of tax breaks (though I wondered about Bush's cuts...)

And here I was thinking the housing crisis was tanking the economy. IMO, the high energy prices are a symptom, not the cause.

But there was an undercurrent forming. More and more energy efficient building was taking hold. Technology advances were bringing costs down. Early adopters were becoming a bit more common. It would be a shame to lose that and take unnecessary steps back economically, and weaken our advance technologically.

Only by well off folks. Middle class and poor folks were not become early adopted. The people who were environmentally friendly were the ones who were going ahead with that energy efficient adoption. And they still are. Perhaps it is only anecdotal, but the person in my office who was considering solar panels and other environmental friendly building still is... in fact he just bought a dual flush toilet and replaced all of his windows to make them leak less.

This undercurrent was by the people who aren't fazed that much by high energy prices.

Ignoring the suffering of people just because they aren't your nationality is sick and wrong. But you cheer on their starvation.

Higher food prices are only partially due to higher fuel prices, and probably a fairly small amount.

Diversion of food crops to biofuel crops, increase in world population growth, increased demand in Asia for a more varied diet (especially meat) are far more integral to what caused the food price crisis.

Switching some people from SUVs to compact cars or even public transport, just doesn't make it right. A tax could do that without causing the global repercussions anyways.

Actually it doesn't. It requires people thinking they'll have to pay an arm and a leg for gas if they don't.

In fact the only real proposals have been to eliminate the gas tax for the summer, the complete opposite of what you are pretending the crisis would lead to.

You mean pandering for short term political gain? And what has been the response to this "real proposal"? Widespread objection.

And, you are forgetting about localities proposing more mass transit or spending more on existing mass transit.

The difference between an SUV and more fuel efficient car isn't all that much when you work it out. The price at the pump is the obvious effect, but the real differences will show up later in higher prices for other goods, in combination with a weakening economy. Both of which won't clearly show the problem. When people go to Walmart and finally see the prices going up instead of down, most won't realize it's largely because of oil costs.

As a long term effect of more fuel efficient cars, it will be. And more political support for mass transit spending. People have responded greatly to the price at the pump. They've been driving less. They've been taking mass transit at record numbers. They've been buying far more fuel efficient cars.

[Aeson]

Originally posted by Imran Siddiqui
And here I was thinking the housing crisis was tanking the economy. IMO, the high energy prices are a symptom, not the cause.

There's tanking, and there's tanking... the housing crisis isn't something that on it's own would tank the economy as much as adding in a commodities boom. Nor is it something the necessitates a commodities boom. (In fact, on it's own it would lead to falling prices.)

You could say the boom was "caused" in part by the housing problem, but that was only incidentally, due to how the credit crisis was addressed.

Only by well off folks. Middle class and poor folks were not become early adopted. The people who were environmentally friendly were the ones who were going ahead with that energy efficient adoption. And they still are.

Of course middle class and poor won't be early adopters. They rely on the technology coming down in price (as it will normally) because of the early adopters helping to pay for the development costs and switch to mass production. While there are tax incentives, it still requires you to have the up-front capital or credit to purchase. Rising prices and falling incomes are going to price more people out. Especially when those who actually can adopt the technology... homeowners... are hurting as much as they are now.

Perhaps it is only anecdotal, but the person in my office who was considering solar panels and other environmental friendly building still is... in fact he just bought a dual flush toilet and replaced all of his windows to make them leak less.

I'm just guessing he isn't one of the millions in a negative equity position in their home... or one of those being hit hard by the recession either.

And yes, it is only anecdotal. It's patently obvious that as prices increase, and people's expendable income decreases, there is less potential for adoption of expensive technologies.

This undercurrent was by the people who aren't fazed that much by high energy prices.

But to become mainstream requires that the prices come down in relation to incomes, which is the opposite of what is happening now.

Higher food prices are only partially due to higher fuel prices, and probably a fairly small amount.

Diversion of food crops to biofuel crops, increase in world population growth, increased demand in Asia for a more varied diet (especially meat) are far more integral to what caused the food price crisis.

There are other factors, sure, but fuel prices are doing their part. (Biofuel itself being partially a response to higher gas prices. Another one of the "knee-jerk" reactions you could point to in fact.)

Actually it doesn't. It requires people thinking they'll have to pay an arm and a leg for gas if they don't.

Rising oil costs do not necessarily accomplish this either, since oil costs (adjusted for inflation) have gone down in the past. Many people may just want to wait it out (right or wrong).

You mean pandering for short term political gain? And what has been the response to this "real proposal"? Widespread objection.

But no real solutions.

And, you are forgetting about localities proposing more mass transit or spending more on existing mass transit.

I have said several times that there are benefits to higher gas prices, just that there are negatives as well. You want to downplay all the negatives and pretend that they either don't exist, or are negligible.

The real solution isn't higher fuel costs, which at best just prolong the inevitable by transferring consumption, but rather lower alternative energy costs and actually adopting it when it is feasible.

As a long term effect of more fuel efficient cars, it will be.

You are assuming no one will ever go back. Right now we are in a recession, money is tight, and oil prices are skyrocketting. People have the incentive to drive less, and drive more fuel efficient cars. That's happened in the past and prices have come back down. You are naive to think this is a long-term fix.

A tax could be kept in place as long as it was useful. Price fluxuations are not readily controllable, and may go too high or too low. It's not a good thing in any case when it's going to tank the economy.

[Rufus T. Firefly]

Well, this is timely.

Rural U.S. Takes Worst Hit as Gas Tops $4 Average

By CLIFFORD KRAUSS

TCHULA, Miss. — Gasoline prices reached a national average of $4 a gallon for the first time over the weekend, adding more strain to motorists across the country.

But the pain is not being felt uniformly. Across broad swaths of the South, Southwest and the upper Great Plains, the combination of low incomes, high gas prices and heavy dependence on pickup trucks and vans is putting an even tighter squeeze on family budgets.

Here in the Mississippi Delta, some farm workers are borrowing money from their bosses so they can fill their tanks and get to work. Some are switching jobs for shorter commutes.

People are giving up meat so they can buy fuel. Gasoline theft is rising. And drivers are running out of gas more often, leaving their cars by the side of the road until they can scrape together gas money.

The disparity between rural America and the rest of the country is a matter of simple home economics. Nationwide, Americans are now spending about 4 percent of their take-home income on gasoline. By contrast, in some counties in the Mississippi Delta, that figure has surpassed 13 percent.

As a result, gasoline expenses are rivaling what families spend on food and housing.

“This crisis really impacts those who are at the economic margins of society, mostly in the rural areas and particularly parts of the Southeast,” said Fred Rozell, retail pricing director at the Oil Price Information Service, a fuel analysis firm. “These are people who have to decide between food and transportation.”

A survey by Mr. Rozell’s firm late last month found that the gasoline crisis is taking the highest toll, as a percentage of income, on people in rural areas of the South, New Mexico, Montana, Wyoming and North and South Dakota.

With the exception of rural Maine, the Northeast appears least affected by gasoline prices because people there make more money and drive shorter distances, or they take a bus or train to work.

But across Mississippi and the rural South, little public transit is available and people have no choice but to drive to work. Since jobs are scarce, commutes are frequently 20 miles or more. Many of the vehicles on the roads here are old rundown trucks, some getting 10 or fewer miles to the gallon.

The survey showed that of the 13 counties where people spent 13 percent or more of their family income on gasoline, 5 were located in Mississippi, 4 were in Alabama, 3 were in Kentucky and 1 was in West Virginia. While people here in Holmes County spent an average of 15.6 percent of their income on gasoline, people in Nassau County, N.Y., spent barely more than 2 percent, according to the survey.

Economists say that despite widespread concern about gasoline prices, the nationwide impact of the oil crisis has so far been gentler than during the oil crises of the 1970s and 1980s, when shortages caused long lines at the pump, set off inflation and drove the economy into recession.

Americans on average now spend about 4 percent of their after-tax income on transportation fuels, according to Brian A. Bethune, an economist at Global Insight, a forecasting firm. That compares with 4.5 percent in early 1981, the highest point since World War II. At its lowest point, in 1998, that share dropped to 1.9 percent.

“Gas prices have doubled over the last year but the economy has not fallen off the cliff,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “But for the rural lower income people, as a proportion of their income the rise of gas prices is very high.”

While people everywhere are talking about gasoline prices these days, some folks in Tchula (the T is silent) have gone beyond talking.

Anthony Clark, a farm worker from Tchula, says he prays every night for lower gasoline prices. He recently decided not to fix his broken 1992 Chevrolet Astro van because he could not afford the fuel. Now he hires friends and family members to drive him around to buy food and medicine for his diabetic aunt, and his boss sends a van to pick him up for the 10-mile commute to work.

A trip from Tchula to the nearest sizable town about 15 minutes away can cost him $25 roundtrip — for the driving and the waiting. That is about 10 percent of what he makes in a week.

Taking a break under some cottonwood trees beside a drainage ditch filled with buzzing mosquitoes, Mr. Clark and members of his work crew spoke of the big and little changes that higher gas prices have brought. The extra dollars spent at the pump mean electric bills are going unpaid and macaroni is replacing meat at supper. Donations to church are being put off, and video rentals are now unaffordable.

Cleveland Whiteside, who works with Mr. Clark and used to commute 30 miles a day, said his Jeep Cherokee was repossessed last month, because “I paid so much for gas to get to work I couldn’t pay my payments anymore.” His employer, Larry Clanton, has lent him a pickup truck so he can get to work.

Signs of pain and adaptation because of the cost of gas are everywhere. Local fried chicken restaurants are closing because people are eating out less. At the hardware store here, sales have plummeted to $30 a day from $250 a day a month ago.

“Money goes to gasoline — I know mine does,” said the hardware store’s manager, Pam Williams, who tries to attract customers by putting out choice crickets for fishing bait beside the front door.

Local governments are leaving grass high along the roads and doing fewer road repairs to save on fuel costs. The Holmes County government has cut the work week to four days to give workers gasoline relief (keeping the same total of hours), and politicians are even considering replacing sanitation workers with prison inmates on some shifts to conserve money for fuel.

The local price for a gallon of regular unleaded gasoline was roughly $3.85 last week, slightly below the national average, but the median family income in Holmes County is about $18,500.

Nationwide, regular unleaded gasoline reached an average of $4.005 on Sunday, according to the American Automobile Association. That is the highest price ever and about a dollar higher than at the start of the year.

While looking to cut workers at his fish processing plant in nearby Isola, Miss., Dick Stevens, president of Consolidated Catfish Producers, said that 10 workers walked into his office last week and volunteered to take a buyout rather than continue commuting from Charleston, Miss., 65 miles away. “The gas ate them alive,” he said.

Workers at the plant are trying to find ways to cope. Josephine Cage, who fillets fish, said her 30-mile commute from Tchula to Isola in her 1998 Ford Escort four days a week is costing her $200 a month, or nearly 20 percent of her pay.

“I make it by the grace of God,” she said, and also by replacing meat at supper with soups and green beans and broccoli. She fills her car a little bit every day, because “I can’t afford to fill it up. Whatever money I have, I put it in.”

Sociologists and economists who study rural poverty say the gasoline crisis in the rural South, if it persists, could accelerate population loss and decrease the tax base in some areas as more people move closer to urban manufacturing jobs. They warn that the high cost of driving makes low-wage labor even less attractive to workers, especially those who also have to pay for child care and can live off welfare and food stamps.

“As gas prices rise, working less could be the economically rational choice,” said Tim Slack, a sociologist at Louisiana State University who studies rural poverty. “That would mean lower incomes for the poor and greater distance from the mainstream.”

http://www.nytimes.com/2008/06/09/business/09gas.html?hp

These are not folks who are going to be helped by light rail or other transit schemes. Nor are they folks with the skills, education, and/or wherewithal to change careers and move elsewhere. These are folks who are screwed by high gas prices, pure and simple. And there doesn't seem to be any safety net for them, nor any plan to put one up.

So, again, good development in the long term -- but hard to be happy about the genuine human misery (not just inconvenience) it's going to inflict on some people in the short term.

[Julian Delphiki]

Pfft. Gas is something like $9/Gallon here, it's not like your prices are high.

[SpencerH]

I wonder whether high gas prices will effect our illegal problem? I think this may alter their perception of economic benefits to working in the USA.

[Imran Siddiqui]

While there are tax incentives, it still requires you to have the up-front capital or credit to purchase.

But even those with the up-front capital or credit weren't purchasing it. Even with generous tax incentives. The carrot just wasn't working.

It's patently obvious that as prices increase, and people's expendable income decreases, there is less potential for adoption of expensive technologies.

How much demand was there to adopt the expensive technologies before the energy crisis? It wasn't that high at all. I mean we are talking about a population where a substantial number believe global climate change doesn't exist and Al Gore is a loony. In that situation, how many people do you think were banging down the doors for solar panels, if only they could afford them?

With high energy prices, demand has, obviously gone up.

But, I don't see it as being that big of a problem that huge tax breaks wouldn't fix. Have the government basically give away the solar panels by huge tax breaks on buying them. That would solve that problem wouldn't it?

Biofuel itself being partially a response to higher gas prices.

Increased acreage to Biofuel has been around for waaay longer than this crisis. It has to do with giving farmers a subsidy... and partially because Iowa is the first caucus.

People have the incentive to drive less, and drive more fuel efficient cars. That's happened in the past and prices have come back down. You are naive to think this is a long-term fix.

It's not a long term fix, but spending on mass transit and a move to more fuel efficient cars is going to help out quite a bit in the long run. The oil shocks of the 70s gave a MASSIVE boost to more fuel efficient cars, especially from Japan. Without that shock, I dunno if the Camry or Accord would be the best selling car in the US.

[MikeH]

Don't forget that US gallons are smaller than Imperial/UK gallons when you are comparing MPG stats.

It's about 1.2 times bigger, so 20MPG US is about 24MPG Imperial.

Still a crap MPG, but slightly less crap.

[Spec]

Originally posted by Theben
Screw hybrids, we need to get back to 100% electric cars that recharge from an environmentally 'safe' source.

HYDROGEN GOD DAMNIT!!!

Every car out there can easily be converted to hydrogen.

Electric cars Hydrogen cars

Hydrogen power>Electrique power
Hydrogen engine sound>Electric engine sound
Source of power, both water at base
-Elctric engines produce magnetic fields
-Hydrogen engines produces vapor

Hydrogen>Electric. Get that through your thick hippy heads people!



Spec.