Pricey Petro Prices Don’t Deter Drivers
That’s the only conclusion you could draw from this AP article.
High gasoline prices may dent economic growth, but consumers’ fuel appetite is still strong. Those trends are likely to persist, experts said, as average nationwide pump prices approach $3 a gallon a threshold once feared to be disastrous for motorists and potentially the economy. Citigroup Smith Barney senior economist Steven Wieting said the conventional wisdom that $3-a-gallon was some kind of tipping point “has been largely overstated.”
The reality is that America is a nation with a passionate love affair for driving. That hasn’t changed anytime since I started driving in 1972. The only time we didn’t drive as many miles as we used to was the price control days of the Nixon Administration and the price-capping days of the Carter Administration. That’s because we had gas rationing. In other words, it was a government-mandated driving reduction.
Oil consumption will drop when the world’s economy slows down and not a minute sooner. I’ve said for a very long time that the economic growth in India and China had far more to do with oil prices than did Bush’s supposed coziness with oil companies. This article says that I’ve been proven right:
While gasoline demand is not expected to collapse, oil analysts caution that weakening economic growth could temper soaring energy prices over time. “It’s kind of a slower, more lagging impact,” said Antoine Halff, director of global energy at Fimat USA in New York.
Finally, this lifestyle choice is noteworthy:
Wachovia Corp. economist Jason Schenker said motorists cannot instantly change their lifestyles, the type of vehicle they drive, the distance they drive to work, and so “consumption is essentially fixed. Even now, SUVs and light trucks are among the majority of vehicles sold,” he said.
There’s a political side to this article: Gas prices won’t be a dominant issue in this fall’s election. People won’t like the high gas prices but I think it’s something that they’ve already adjusted to for the most part.
Technorati Tags: Economy, Oil Prices
Cross-post at LetFreedomRingBlog
July 12th, 2006 at 7:33 pm
[...] Cross-posted at California Conservative Categories: Midterm Elections, Economy, Energy, Environment | [...]
July 13th, 2006 at 5:07 am
You just couldn’t be more wrong.
Perhaps people have adjusted to the prices, but if you think it won’t be an issue in the coming elections or if you believe that most people actually believe that old canard that the market is driving the prices and not the oil companies then you, like far too many conservatives, are absolutely “whistling through the graveyard” on the gas price issue.
Most consumers are smart enough to figure out that because oil companies control refining capacity, they necessarily control the “SUPPLY” side of the “SUPPLY AND DEMAND” equation, giving them the power to pinch off supply and pocket the obscene profits that follow.
Add to that the daily stories of oil companies being caught illegally gouging on propain prices down south, and on-going stories of possible illegal manipulation of natural gas prices and people are fed up.
Greed at the pump is driving up energy costs for all us, driving down real wages for middle class families, and putting the pinch on everyone.
Come November there is going to be hell to pay for it.
You’re kidding yourself if you think there isn’t.