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.