Hogan's Alley

Saturday, April 22, 2006

Gas Price Politics

Watching the cable news networks today one is struck by the large number of people willing to blame the current spike in gas prices on someone they don't like. I would suggest the following rule of thumb for use in watching the news: whenever anyone stands up and blames the President or the Democrats or the Republicans or the oil companies or the auto makers or any other person or group, assume they are lying.

Gasoline prices are the result of a market. They are responsive to the law of supply and demand. Worldwide demand is up while demand in the US has stayed virtually flat. It is easy to stand in front of a TV camera and act outraged at the $3.10 a gallon you just paid, but the truth is that these prices have not yet moved Americans to effectively do anything to change either their behavior or the policies of their government. Available data through 2004 indicates that overall sales of automobiles are up, with SUV's and light trucks making up an increasingly large share of the market. Among SUV's, the sale of gas-guzzling Hummers has been steadily increasing. We have met the enemy, and he is us.

In my judgment we are a long way from a price per gallon cost that will motivate significant numbers of Americans to act. What is that number? I don't know, but my guess is that it will require something above $5.00 per gallon. Only then will people refuse to buy cars that aren't very efficient, or hybrids, or flex-fuel, forcing the manufacturers to produce cars to meet that demand. Also, only then will people force our politicians to move beyond platitudes and recrimination and towards creating the laws and incentives that will begin to make alternative fuels high efficiency vehicles a reality. Not to mention taking other steps to achieve pollution and cost lowering measures in the rest of our fossil fueled culture.

Until that time, those interviewing politicians should demand to know what the person in front of them is doing now to solve this problem. If they blame someone else for blocking the way, what are they doing now to reach some sort of compromise or quid pro quo to assure that progress occurs. Short of positive answers to these questions, these politicians are only demonstrating the growing total impotence of the American government in our age.