Just a thought
I'd say this is pretty close to right.
"I'VE NOTED REPEATEDLY that gas prices don't seem to be high enough to affect people's behavior. Apparently they'd have to increase a lot more to do that:
In 1962 -- a year writ large in the popular imagination as the quintessential year of muscle cars and cheap gasoline thanks to the movie American Graffiti -- gasoline prices averaged 31 cents per gallon. When we factor changes in disposable income, today’s gas would have to cost $4.48 to be a comparable burden.
The public likewise thinks of 1972 as the last year of energy innocence prior to the rise of OPEC and the onset of shortage. Fuel prices in 1972 averaged 36 cents per gallon, a hefty $2.77 per gallon in today’s terms. While still high, this price is not all that different than the prices we were paying earlier in the year.
No wonder people are still driving fast and often."
posted at 10:16 AM by Glenn Reynolds
I work in the automobile industry (selling Audis) and have had a couple of customers trade in their gas guzzling Suburbans for 30mpg all wheel drive A4 wagons in the last couple of months. But there certainly hasn't been a mad dash toward more fuel efficient vehicles yet.
"I'VE NOTED REPEATEDLY that gas prices don't seem to be high enough to affect people's behavior. Apparently they'd have to increase a lot more to do that:
In 1962 -- a year writ large in the popular imagination as the quintessential year of muscle cars and cheap gasoline thanks to the movie American Graffiti -- gasoline prices averaged 31 cents per gallon. When we factor changes in disposable income, today’s gas would have to cost $4.48 to be a comparable burden.
The public likewise thinks of 1972 as the last year of energy innocence prior to the rise of OPEC and the onset of shortage. Fuel prices in 1972 averaged 36 cents per gallon, a hefty $2.77 per gallon in today’s terms. While still high, this price is not all that different than the prices we were paying earlier in the year.
No wonder people are still driving fast and often."
posted at 10:16 AM by Glenn Reynolds
I work in the automobile industry (selling Audis) and have had a couple of customers trade in their gas guzzling Suburbans for 30mpg all wheel drive A4 wagons in the last couple of months. But there certainly hasn't been a mad dash toward more fuel efficient vehicles yet.
There's a guy here in Bozeman who thought he saw an opportunity to make a killing when gas prices hit $3.00 a gallon last summer. He imported a bunch of new Smarts (as opposed to smarts) from Canada and opened a used Smart lot. He had to register the cars in order to import them, thus they are used. Plus, he had to price them at $30,000 each in order to make ends meet. No sooner had he openned his operation to print money, than it was announced that Smarts would be coming to the U.S. within a year or so, and at a price of something like $15,000 a pop. Then gas prices dropped to about $2.40 a gallon. Also, you'd have to take a Canadian vacation to get warranty work done. Hmmm? should I pay 30 grand for one of these pigs, or wait a year to get a new one, with a U.S. warranty, for half that? Even Bozeman hippies can figure that out. I don't believe he's sold even one of them.
Last edited by Day on Fri May 25, 2007 6:23 pm, edited 2 times in total.
I hate to quibble with you, Day (he says with a perfectly straight face) but in real dollars $.31/gallon in 1962 = $2.02/gallon in 2006. That's quite a large difference, don't you think? Everything I've read has said that we have now reached the highest price per gallon in history, beating out the price under Reagan (yes, the price of gas was higher under Reagan than Carter even with Reagan's price controls... inconvenient truth).
But, to bolster your argument, in 2000 that same gallon of gas should have been $1.72 and I remember getting gas for $.80/gallon. Back then we weren't being gouged for monstrous profits... just huge profits.
But, to bolster your argument, in 2000 that same gallon of gas should have been $1.72 and I remember getting gas for $.80/gallon. Back then we weren't being gouged for monstrous profits... just huge profits.
[size=75]You are as bad as Alan, and even he hits the mark sometimes. -charlie
"Not all conservatives are stupid, but most stupid people are conservative." - John Stuart Mill[/size]
"Not all conservatives are stupid, but most stupid people are conservative." - John Stuart Mill[/size]
Alan, You know I think you're crazy, but I never said you weren't smart. You're figures are correct, when you figure the price of gas adjusted for inflation. The figures provided by Mr. Reynolds took into account inflation plus the rise in disposable income, to estimate the overall "burden", which I take to mean the percent of disposable income that is spent on fuel. While this is a novel idea to me, I do think that it provides a useful way to explain why people have been relatively unaffected by the big rise in fuel prices.
You have made a good point that is worth repeating, I think. For all the squawking about high gas prices in recent years, we have just now passed the record prices of 1981?, when adjusted for inflation. But, because people today have so much more money to spend, prices would still have to go even higher to have a similar effect on behavior that the oil shock of the late seventies/early eighties had.
Well, maybe I've accused you of saying stupid stuff in the past, but really, I meant crazy shit, not stupid.
You have made a good point that is worth repeating, I think. For all the squawking about high gas prices in recent years, we have just now passed the record prices of 1981?, when adjusted for inflation. But, because people today have so much more money to spend, prices would still have to go even higher to have a similar effect on behavior that the oil shock of the late seventies/early eighties had.
Well, maybe I've accused you of saying stupid stuff in the past, but really, I meant crazy shit, not stupid.
Apology(?) accepted.
I see what you mean. If gasoline were over $4/gallon right now it would be more expensive than it was when it was .31/gallon. Got it.
I don't think that calculation incorporates the income disparity that has developed in the meantime. There were a hell of a lot more middle class people in the 1960's than today. As a matter of fact there's a very steep divide between the wealthy and the rest of us. The middle class is shrinking rapidly (all those people that could hold a good paying manufacturing job but really aren't smart enough to get a college degree), the poor are rapidly increasing in number while the rich are increasing in number only slightly greater than population growth while their actual wealth is skyrocketing. Where is that money coming from? It's coming from those at the low end of the spectrum in the form of increases in fees resulting from tax cuts for the wealthy, increases in other costs as a result of the decrease in funding on infrastructure, increases in contracts to private companies to perform government functions (resulting in higher costs which inordinantly impact the poor), and of course the gigantic profits by oil, insurance, pharmaceutical, and other industries.
Back when gas was .$31 a gallon one could assume that one person working 40 hours a week could support a family of four at a level above poverty. When the bottom is so high, moving up is much easier. The neo-con agenda has made sure that an ever increasing number of people will become more powerless and poorer as time goes by. The proof is in the pudding and the trends are evident. This tide raises only yachts.
I see what you mean. If gasoline were over $4/gallon right now it would be more expensive than it was when it was .31/gallon. Got it.
I don't think that calculation incorporates the income disparity that has developed in the meantime. There were a hell of a lot more middle class people in the 1960's than today. As a matter of fact there's a very steep divide between the wealthy and the rest of us. The middle class is shrinking rapidly (all those people that could hold a good paying manufacturing job but really aren't smart enough to get a college degree), the poor are rapidly increasing in number while the rich are increasing in number only slightly greater than population growth while their actual wealth is skyrocketing. Where is that money coming from? It's coming from those at the low end of the spectrum in the form of increases in fees resulting from tax cuts for the wealthy, increases in other costs as a result of the decrease in funding on infrastructure, increases in contracts to private companies to perform government functions (resulting in higher costs which inordinantly impact the poor), and of course the gigantic profits by oil, insurance, pharmaceutical, and other industries.
Back when gas was .$31 a gallon one could assume that one person working 40 hours a week could support a family of four at a level above poverty. When the bottom is so high, moving up is much easier. The neo-con agenda has made sure that an ever increasing number of people will become more powerless and poorer as time goes by. The proof is in the pudding and the trends are evident. This tide raises only yachts.
[size=75]You are as bad as Alan, and even he hits the mark sometimes. -charlie
"Not all conservatives are stupid, but most stupid people are conservative." - John Stuart Mill[/size]
"Not all conservatives are stupid, but most stupid people are conservative." - John Stuart Mill[/size]
Apparently the neo-con war on the middle class ain't going so well here in Bozeman, MT, where the poor white trash seem to have money to burn. They're all driving big honkin' SUVs and four wheel drive pickup trucks, usually with a trailer full of snowmobiles, dirt bikes, or a ski boat behind it, depending on the season.
Of course they have lots of toys. They spend all of their money on toys and no money on retirement. In about 30 years we are going to bankrupt the country providing healthcare and social security for everyone who spent their money on junk while they were under 60.
The theory of evolution is just as stupid as the theories of gravity and electromagnetism.
Day wrote:
They're all driving big honkin' SUVs and four wheel drive pickup trucks, usually with a trailer full of snowmobiles, dirt bikes, or a ski boat behind it, depending on the season.
***************
Middleclass heaven, man. Gotta love it. Harleys, guns, boats, jetskis, and climbing gear. Die broke.
ZSpiddy
They're all driving big honkin' SUVs and four wheel drive pickup trucks, usually with a trailer full of snowmobiles, dirt bikes, or a ski boat behind it, depending on the season.
***************
Middleclass heaven, man. Gotta love it. Harleys, guns, boats, jetskis, and climbing gear. Die broke.
ZSpiddy