Saturday, May 31, 2008

Gas Prices

Thomas Friedman has written an article on high gas prices. He starts out talking about what it might be like if someone running for president could actually tell us the truth. A pretty stupid way to write this article since it has nothing to do with who is running for president, but then again Friedman makes a living as a writer and I don't:
For starters, he or she would explain that there is no short-term fix for gasoline prices. Prices are what they are as a result of rising global oil demand from India, China and a rapidly growing Middle East on top of our own increasing consumption, a shortage of “sweet” crude that is used for the diesel fuel that Europe is highly dependent upon and our own neglect of effective energy policy for 30 years. Cynical ideas, like the McCain-Clinton summertime gas-tax holiday, would only make the problem worse, and reckless initiatives like the Chrysler-Dodge-Jeep offer to subsidize gasoline for three years for people who buy its gas guzzlers are the moral equivalent of tobacco companies offering discounted cigarettes to teenagers.

Friedman is an asshole but in this case I agree with him. I remember watching the rise of popularity of bigger and bigger SUV's with dismay from the time they first came out. I kept wanting to say: "What the hell is wrong with you people? Have you learned nothing? Gas prices are just going to keep going up, always, the fact that it's stable for a brief time means nothing." And that is still true today, eventually we will have $7, $9 even $12 per gallon.

And human nature being what it is that is what is needed to inspire us to invent alternate energy sources. It's a shame the Gas Crisis of the 70's taught no lessons to the public at large, but it sure taught me something. Back then I had a little Opal Kadett, a car that is no longer made which is a fate it deserves, but in those days I could fill up it's little 10 gallon tank for $2.50. After the Gas Crisis it cost $10.00. Today 10 gallons would cost $40.

Friedman goes on to talk about his mythical presidential candidate:

But the message going forward to every car buyer and carmaker would be this: The price of gasoline is never going back down. Therefore, if you buy a big gas guzzler today, you are locking yourself into perpetually high gasoline bills. You are buying a pig that will eat you out of house and home. At the same time, if you, a manufacturer, continue building fleets of nonhybrid gas guzzlers, you are condemning yourself, your employees and shareholders to oblivion.

All of this is so true but the fact is the car makers are stuck, they have all these gas guzzlers to get rid of, they have to try and sell them. After all, that's how the free market system that Friedman is usually so fond of works. And those companies who were too stupid to plan ahead would go out of business, this is a good thing to free market people. Yet when Chrysler went bankrupt many, many moons ago the government bailed them out because it would have had a devastating impact on our economy. Like we bailed out Bear Stearns recently. If we keep bailing out these large corporations when they go under then we should impose stricter regulations on them in order to keep such things to a minimum. But the Republicans want to give the corps more and more freedom to conduct business any way they want then turn around and cry for corporate welfare when the things they choose to do end up being short-sighted, greedy and stupid.

We all get screwed with higher gas prices because gas is required in every business that exists and they will pass those increases on to us. After all, it's not like the executives should take pay cuts or anything. But it really is the only thing that will change our energy policies. When all the other alternatives become cheaper than gas those businesses will boom.

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