Sunday, May 18, 2008

$4.00 gas on the way

I took this photo about a month ago.

Then yesterday, I drove by this same station and the numbers had changed just a bit.

Every category was up by 40-44 cents.

No doubt about it, we're headed for $4.00-$5.00 gas by the end of summer.

There are some benefits to rising fuel costs. People drive less, consume less and think more intentionally about how to do things.

High fuel prices are good for public transit, Downtown housing developers, transportation innovators and the environment.

But, there's lots of downside here, as well.

The poor who have cars will be forced to park them. Many of my friends are buying gasoline a gallon at a time.

Most will begin opting for public transportation as much as possible. That's okay for most people, but the rising costs of food, utilities, medical services and just about everything else hits people with limited incomes hardest.

Market forces, when totally unchecked, tend to devour the poor.


Something to think about in church today.

Or, is church all about other matters?




Justin said...

Yes, the church should be concerned first with justice for the poor, but to blame this on anything but government intervention in the markets is ridiculous, Larry.

Gas cost roughly the same in gold now as it did in 2000 when it was selling for just over a dollar a gallon. The cost of gas hasn't risen so much as the value of the dollar has plummeted.

I will say that much of this inflation has occured because of spending for the iraq war, but the increase in money supply also occurs because of massive government spending projects. We don't have a wealth redistribution system so much as we promise stuff we have no way to pay for without shutting the economy down, so, we print money to cover the costs, and hope that the economy grows fast enough to keep up with the inflation. This is why you have the boom and bust cycle that we have as well. Large government spending hurts the poor by causing this inflation.

Larry James said...

I suppose that some people long for the simplicity of your explanations, Justin. Ever read anything about the New Deal following the Great Depression? There is a middle ground that we have decided not to move toward since 1980.

Daniel Gray said...

Justin, while some of your points are true (gas prices affected by the falling dollar, the boom/bust cycle), they have nothing to do with government failure to change the face of poverty. I agree that government should not spend money it doesn't have, but government spending from money it actually collects does little to hurt the economy (minus a deadweight loss).

Yet government money (your idea of theft) has the potential to significantly improve the lives of people and create a better, sustainable economy in the long run, provided it's used in the correct way (i.e. New Deal legislation). Until you conquer your fear of government, this discussion is not going to improve. Unchecked government is bad. Unchecked capitalism is bad. But when the two work in tandem, they can counteract the negative effects of both.

Larry, not sure if these energy costs are going to get any better. But it's definitely pulling our society out from under its feet and exposing us for not having a better mass transit system. Especially in more southern cities (St. Louis, Dallas, Memphis), there is little or no mass transit system. If we had those systems in the first place, I doubt these energy problems would be as big of a concern to us.

Larry James said...

Daniel, you are correct about energy prices. They aren't going down. Someone suggested to me last week that we ought to tax gasoline to the point of raising the price much higher to force changes in consumption and to enable progress in mass transit development and research for alternative fuels and transportation.

Justin said...

Something like 30% of economists believe that the New Deal slowed economic recovery, while only 51% disagree (barely a majority).

This guy writes an interesting paper for anyone who would want to read.

Anonymous said...

That's a pretty telling statistic, if true... And since economists tend to be wary of government intervention, the fact that 70% DIDN'T see a definite cause of a slow down, I'd say the New Deal was a success. Few negative economic effects for a program that changed the lives of many struggling people.

Let's use an analogy -- Democrats represent economists, Republicans represent the New Deal. If I am a Republican running a political race in a predominantly Democratic district, I would be overjoyed to win by a margin of 51-30. I'd count it as a huge success.

belinda said...

There is no transit system here in my neck of the woods - Huntsville, AL. NASA and Redstone Arsenal are located here, which employ the majority of the population either civil serice or contractor. Yet there is no mass transportation in any shape or form. It's killing me.

Anonymous said...

There is an environmental benefit to all of this, however. Since Washington doesn't have the guts to increase gas mileage standards, at least $4 gas is causing market demand for higher mileage cars. Something of a silver lining.

Anonymous said...

With regard to Larry's comment "Market forces, when totally unchecked, tend to devour the poor", I don't believe that the market forces are totally unchecked.

Consider this. Governmental restrictions on drilling and new refineries, pose a severe limitation and handicapping of the free market. These limitations are a major cause for increasing fuel prices. Also, the lack of new nuclear power plants has also been a major factor in our current predicament.
There are no unchecked market forces, only a severely limited market mechanism.

To this ole farm boy, the poor and unfed will eventually be forced off the road altogether, as the environmental activists continue to push for prohibitions on domestic petroleum exploration and development in a real manner."Pie in the sky" alternate energy sources, which are decades away from even making a dent in our energy needs, are not a solution..

Anonymous said...

If protecting the Alaskan range equals limiting market forces, then may that kind of limitation increase. As Larry indicated, high fuel costs will light a fire under truly viable, alternative fuel solutions. The sound of the comment just above this one reminds me that "the flat earth society" must still be accepting members!

Anonymous said...

Hey 7:51 PM, Anonymous,

What about the poor? They are the first ones out in the cold in your tree hugging scheme? Rising fuel costs certainly impact the poor the greatest.

Further, there are no viable "alternate energy" schemes on the horizon for decades.

Also, environmentally friendly drilling has been the rule for sometime. The amount of the great Alaskan wilderness that would be disturbed is small.
Finally, a falling tree in the woods makes no sound unless someone is there to hear it! Only the idle rich will ever be able to enjoy the barren wasteland of the Alaska you speak of.