Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Yup- I think that's exactly what it is, as that's exactly what's happened every time in the past. Back when I was in high school, I had a part-time job pumping gas (up in NJ, where apparently the politicians think people are too stupid to operate a gas pump....lol), and at that time, gas cracked $1/gallon for the first time. We had the same "world coming to an end" headlines, and people started panicing and looking to buy more fuel-efficient vehicles (sound familiar??). There was talk about electric cars, everyone wanted a diesel (back when diesel was much cheaper than gasoline), etc. A few months later, it was back to the status quo, as gas slid back down (but not to it's previous level).
Then, back a ways, the same thing happened when gas topped $2/gallon for the first time, and again when it topped $3/gallon for the first time. In each case, there was a big uproar about how people couldn't afford to drive, the airlines were all going out of business, tourism would implode because people couldn't afford vacations, blah, blah, blah. And then in the fall, the prices fell back a little, and everything was good in the world again.
We'll see how this catastrophe plays out, but I'm willing to put money on the fact that it ends the same way.
Bob, your observations of the past are right, and you may well be right about things carrying on the same way, but I think we might just be hitting the zone where gas prices impact families more significantly.
If gas costs $1/gal and you drive 12,000 miles a year, operating a 15mpg or 25mpg car costs $800 or $480 in gas, respectively. At $3.50/gal you're looking at $2,800 or $1,680 a year in gas. At $5.00/gal the figures are $4,000 and $2,500. Not only are those numbers getting bigger and looking like a more significant bite out of the family budget, but of course the difference in cost between the more and less fuel-efficient vehicle increases as well.
If we bump up to driving 20,000 miles per year (probably more realistic than 12,000 for many commuters), then at $1/gal the gas costs of the 15mpg and 25mpg vehicles are $1,333 and $800. At $3.50/gal we're up to $4,667 and and $2,800 while at $5/gal it's $6,667 and $4,000. That's a lot to spend on gas, and the difference in gas cost between the two vehicles is a big number ($2,667).
I didn't pick the 15mpg and 25mpg numbers quite arbitrarily - they actually represent my household's two vehicles. Even if we cut back on driving as much as possible, if gas prices stay in the $3.50 to $4.00 range, the potential gas cost savings are tipping us into getting rid of that 15mpg vehicle.
It makes sense that back in the day when gas prices went from $1 to $2, people briefly talked about mass transit and more fuel-efficient vehicles but then they got over the sticker shock and carried on. At those prices, your cost savings per year by making a change of vehicle are in the hundreds. That's not all that huge to a middle-class family. But now we're getting into the thousands. I think it might well be that more of the middle class, like my family, is getting to the point of actually carrying through on making some kind of change to save on transportation costs, be it riding MARTA (if available), a more efficient vehicle, or even contemplating a move.
Yes, but unlike addiction to cigarettes, alcohol, or drugs, which can all be cured rather simply (I know, it's not the easiest thing in the world, but it can be done), for many people the "addiction to oil" isn't as simple as saying "I want to quit- I need to move closer to work, sell my car, and ride my bicycle to work". While many people won't change their ways regardless of the ability to do so, there are plenty who would make changes if they could- but there's a whole lot of players that need to get with the program to make it possible on a large scale, and several of them are the folks you listed- the oil industry, the auto manufacturers, and most importantly, the government.
Yes, I'm not discounting anyones role, I just think we are not looking at the root of the problem, because we are the addicts. Gov't, Oil and Auto are pushers, they have a political and profit motive that are not necessarily aligned with the greater good of society.
Yup- I think that's exactly what it is, as that's exactly what's happened every time in the past. Back when I was in high school, I had a part-time job pumping gas (up in NJ, where apparently the politicians think people are too stupid to operate a gas pump....lol), and at that time, gas cracked $1/gallon for the first time. We had the same "world coming to an end" headlines, and people started panicing and looking to buy more fuel-efficient vehicles (sound familiar??). There was talk about electric cars, everyone wanted a diesel (back when diesel was much cheaper than gasoline), etc. A few months later, it was back to the status quo, as gas slid back down (but not to it's previous level).
Then, back a ways, the same thing happened when gas topped $2/gallon for the first time, and again when it topped $3/gallon for the first time. In each case, there was a big uproar about how people couldn't afford to drive, the airlines were all going out of business, tourism would implode because people couldn't afford vacations, blah, blah, blah. And then in the fall, the prices fell back a little, and everything was good in the world again.
We'll see how this catastrophe plays out, but I'm willing to put money on the fact that it ends the same way.
I'll take five gallons on that at even odds.
Actually, I think that it will be somewhere in the middle. A Democratic president and likely a Democratic Congress (or at least one house) -- which imho are a high likelihood at this point -- are going to put a serious and permanent dent in Detroit's end run around the fleet mileage limitations. Heck, even McCain is paying lip service to increased stringency in the last CAFE bill, although he won't give figures.
A major difference, this time, is that it was market forces, not an oil embargo, that caused the spike in prices. Yeah, maybe it was partly speculative, which will correct downwards for a while, but we aren't going to see 30 years pass before the next Big Event in fossil fuel prices.
Georgia, of course, will be more resistant than a lot of states. This is car country.
Atlanta is one of the cities mentioned where intown housing is keeping it's value while the suburbs (and exurbs) are falling.
Probably a function of supply and demand. There is a glut of housing in the suburbs and demand is slacking, while intown housing is more at a premium, with more people looking closer in due to gas prices. The Atlanta market has still held value much better than other markets, since Atlanta never really participated in the bubble of appreciation the way many other markets did.
Supply and demand here were in balance for quite a while. When demand rose in the suburbs, instead of prices rising significantly as they did in many other mature markets, someone would just build more houses a few miles further out. That building fueled additional economic growth which hastened the process.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
