Gas is not really expensive yet
Today from Margaret Swedish:
In the Business Section of yesterday's New York Times, a column by David Leonhardt points out that the price of gas is not as high as you might think.
Using this measure, "the cost of the gas that is needed to drive a mile, a function of both the price of oil and the fuel efficiency of cars," and taking general inflation into consideration, "gas for the average American now costs about what it did throughout the 1960s and early 70s, and much less than the early 80s." As Leonhardt points out, what matters to you is not so much the cost of a gallon of gas but "how far that gallon gets you." How does the cost of driving 100 miles today compare with 40 years ago?
Now I don't mean to sound superior, but going from $2.50 per gallon to $3.15 means something a lot different for me with my Honda Civic that gets more than 40 mpg (today I filled it for about $30) than for the owner of a SUV who fills up at $60-$70.
By sticking with SUVs, we have increased the pinch of higher prices and helped bring about the demise of US auto companies.
Meanwhile, over in Europe, that part of the world over which we love to feel superior, in Germany drivers pay $6.40 per gallon, and no one starts calling for rebates, cuts in federal taxes and price controls. Why? Because it the higher price has encouraged the production and purchase of smaller vehicles, made Europeans more conservation minded, helped pay for the kind of mass transit we sorely need in this country, and created a more effective buffer for sudden increases in the price of crude.
Meanwhile, since many of us feel the injustice of the enormous profits of the big oil companies as prices rise for the rest of us, one way to deal with this (it will take a different Congress) is to do that unmentionable thing of taxing windfall profits, no matter how much CEOs protest that this is not good for the economy (a bogus argument).
It is about time we started paying something closer to the real price of gas. If corporations were forced to add to the price of gasoline the cost of environmental degradation from production, carbon emissions, and such, the price increase would be breathtaking – and then maybe we would be ready for the big transition away from this oil-based economy towards something more sustainable, something that might promise our kids a future.
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