You've probably noticed that gas prices here in the United States have been at "historic" high levels for quite a while now. What that means is that they're super-high compared to what we've gotten used to, but not quite as high as they were under Jimmy Carter when prices are adjusted for inflation. Everyone's moaning and whining about how much they're paying. Right now it's an average of an extra $500 per vehicle per year compared with a couple of years ago, and that's a shock. It's counteracted some of the benefits of the Bush tax rebates, it's breaking the back of the working man, it's going to lead to runaway inflation, and so on - or so they tell us again and again.
Here's the truth. Gas prices have been artificially low in the US for decades. It's been great for the auto industry, and it has helped keep other consumer prices down, but it's also built up hugely false expectations, led to dangerous complacency in a number of industries, devastated our balance of trade, and cost us a good measure of our economic independence. People in every other country around the world are paying about twice what we pay for gas, and they find a way to live with it. Right now we only see the short-term cost, but maybe it's time to look at the long-term benefits of higher gas prices, finally embrace reality and encourage them to go even higher.
Yes, lower gas prices do save us gas money and let us drive bigger and more expensive cars. They also slightly reduce the prices of most consumer goods, which are distributed nationwide by truck. Here's what low gas prices have also done.
• They've destroyed our domestic oil industry by making it unprofitable to exploit the massive oil resources here in the US.
• They've destroyed the railroad industry because they make trucking goods cheap enough that trucks can outperform railroads, which are by nature a more cost-effective and efficient means of transporting goods.
• They've encouraged stagnation in the auto industry. Better, more efficient engines have been designed, but because gas prices have been so low the market demand for them is low, so they aren't being produced with much enthusiasm.
• As a side-effect of this, low gas prices also contribute to higher levels of pollution because they encourage us to drive more than we really need to and not use alternatives.
• They increase the tax burden for everyone because high levels of traffic increase maintenance cost for highways.
• They've encouraged urban sprawl, which has spread people out too much and made urban mass transport impractical and expensive.
• Dependence on low gas prices has put us at the economic mercy of terrorist nations in the Middle East, which we depend on for our supply
• They've even been a large factor in the near-disappearance of the family farm, because with cheap trucking it's easier to bring in produce from outside of the country or from huge agrobusinesses than to buy from small local producers.
Article comments
— go to most recent comments1 - Anna Creech
Wow. Very thoughtful, reasoned, and unexpected coming from you. I think I have mis-judged you.
My little 1995 Toyota Tercel is still getting 40 MPG, but I'd like to eventually get a replacement that is affordable and has a higher MPG. The hybrids are way out of my price range.
2 - Lumpy
Damn. I thought you were like Mr. Tax Cut, but here you are sounding like the most rabid of the enviroleft. What gives?
3 - Ray Ellis
You never cease to amaze me, Dave. And I am foursquare with you on this one.
Not to come across as a rabid treehugger, but I gave up on cars over a year ago, and I very rarely regret that decision. Those who say that you absolutely must have a car in Texas, especially in Dallas, are lazy or not creative or both.
4 - Matthew T. Sussman
You forgot one more advantage of high gas prices:
• An excuse to blame Bush.
5 - Tony G
Blame Bush?
Let's see...Do you support us drilling in Anwar?
6 - Tony G
Dave, I believe we have to not look ahead and get used to paying five dollors a gallon and instead try as hard as we can to keep it low.
Just because France pays 5 a gallon doesn't mean we have to.
7 - Ray Ellis
Once again, the entire point of the article soared right past you, Tony.
8 - Lumpy
Hey, what about the poor working stiff who can barely afford to run his car at $3 a gallon. At $5 he'll lose his job because he can't afford to drive to work if his income is below about $35k a year.
9 - Tony G
I'm with Lumpy. Damn those Europeans and these American European wannabes!!!!
10 - Matthew T. Sussman
Let's see...Do you support us drilling in Anwar?
I'm staunchly opposed to mutilating bodies of former Egyptian rulers.
11 - Tony G
You knew what I meant...now answer the fricken question.
12 - Ray Ellis
This is why the dinosaurs died--they couldn't adapt. You won't lose your job because you can't afford to drive to work--you'll lose your job because you used that as a lame excuse rather than devise an alternative means of making it to work.
Oh--and what is an "American European wannabe?
13 - Tony G
We shouldn't have to adapt to liberal ideas if we don't have to.
An American who is a European wannabe is someone who says "Hey look! The French are paying 5 dollors a gallon so we should too!"
14 - Anna Creech
Employers should to pay employees wages that are enough for them to live near their place of employment. I'm thinking of the low-wage workers that make up the infrastructure of resorts and other high-cost areas. Either pay them enough to live there or you go out of business because you don't have employees.
15 - JR
Tony G: We shouldn't have to adapt to liberal ideas if we don't have to.
Yeah, but we'll have to if we have to.
16 - Peter J
Sorry Dave,
You do make a lot of very good points, theoretically. The only actual benefit that we can realize right now is public transportation. I lived in Boston and left my car parked most of the time but that's pretty much only the case in larger more established cities. Everything else sounds too much like Right wing trickle down economics, they sound great too, only problem the only thing that ever trickles down is crap.
17 - Tony G
JR said: Yeah, but we'll have to if we have to.
This doesn't mean that we shouldn't do everything we can to prevent high gas prices.
18 - JR
Giving mentally retarded people access to the internet is a liberal idea, isn't it?
19 - Ray Ellis
It's one thing to talk thatalk--walking the walk is quite another matter. So that poses the question--what are your solutions, Tony? Or can you get past drivel?
20 - Jared
Eh, I'm bias. It's a good argument, but my dad works for a transportation company. He's paid by the mile. He drives what they give him. he has no say over what kind of fuel he runs on. And obviously public transit isn't an option when the whole point is for you to drive from point A to point B. he's having to spend more time away from home already because of the increase in gas so far. I shudder to think what continually raising the prices would do to the poor man.
21 - Jet in Columbus
Is it me, or is Tony related to BoingBat?
22 - Jet in Columbus
You're not taking into account delivery drivers and people who rent cabs and then try to make a living putting their tips into the gas tank...
I liked the article though, much as I tried not to, damn it.
Solus mei sententia
Jet
23 - Ruvy in Jerusalem
Dave, its's a great article. And if anybody believes in public transport, I do. But owning, and feeding a car was a ncessity in St. Paul, if you wanted a job that paid more than minimum wage. I suspect that this is still true. Bear in mind, that in Israel gas DOES cost $5/gallon, and Israelis tend to earn half of what Americans do - if they are lucky.
In most of your country, intra-city transit, suburb to suburb public transit, and things of this nature just do not exist. Here, we have a pretty decent public transit system, but in the States you do not.
The rails are falling apart in the States. Where will the money come to resuscitate them to carry goods and carry them to all the burgs and farms etc, that you speak of? Will this come from reduced taxes?
The ultimate price you pay for everything in the States will rise to pay for the price of gasoline. Where does that extra money come from? Does it come from the rich? Give me a break!
Tripling the world's oil prices in 1973 has been draining your country of a lot of wealth for 3 decades. The recent increases, which amount to doubling the price of oil is impoverishing your country even more.
You wrote a great article, but it just don't wash clean...
24 - Dave Nalle
Damn. I thought you were like Mr. Tax Cut, but here you are sounding like the most rabid of the enviroleft. What gives?
I didn't make the point in the article, but it ought to be made. The gas tax I propose is NOT the same as the kind of taxes I ordinarily object to. It's more on the order of a usage fee for those who drive a lot. It's not a violation of basic property rights because it is entirely voluntary and only impacts those who choose to drive to the degree that they choose to consume gas.
I'd recommend that a certain amount of money from such a tax be specifically earmarked for regional and local public transportation programs.
As for it hurting the working man, he ought to be taking the bus, carpooling and finding other ways to live within his means anyway, callous though that may sound.
Dave
25 - Dave Nalle
et's see...Do you support us drilling in Anwar?
Well, I certainly do, Tony. Increased domestic production should go hand in hand with conservation.
Dave, I believe we have to not look ahead and get used to paying five dollors a gallon and instead try as hard as we can to keep it low.
Just because France pays 5 a gallon doesn't mean we have to.
But the articifially low price has been the standard for years and it's really not working. It's what killed the Texas oil business in the 1980s, and has had all the other negative effects I note in the article. The idea is not to pay more to keep up with France, but to pay more because it will strengthen our own economy and in the long term will reduce our dependence on foreign oil.
Dave