Centerfield

A few years ago, I decided to reduce my heartache by buying Exxon stock. Now, I see everything as a win-win situation. When prices are low, I can afford to pay my bills. When prices jump, I'm merely funding my dividend. And please don't try to explain to me the fallacy of my logic. Just don't do it.

Posted by: Todd Pearson at May 21, 2007 02:13 PM

I'll believe that people are actually feeling some pain when sales of SUVs start dropping. Although I suppose Congress actually passing a requirement to increase fuel efficiency (as a result of voter demand) might be an indicator.

But until one of those shows up, it's hard to believe that the pain is all that significant for the general population. Irritation at the prices? Sure. But pain?

Posted by: wj at May 21, 2007 03:00 PM

The pain is mostly for those who used low (inflation-adjusted) gas prices to run their low-mpg cars. I know I did! Right up until my 4wd Suburban hit the knacker's yard from sheer age and rust. Then I got a minivan that gets twice the mpg.

Detroit did a bang-up job at increasing fuel efficiency over the last thirty years. The American consumer for the most part took those efficiencies by their own choices in the form of higher horsepower rather than better mileage. Because gas was still cheap by any relevant measure, and they wanted solid, powerful vehicles.

My 1989 'burb had a 5.7L V8 producing 185 hp and got 14 mpg (pretty much the same city or highway!). The 1999 had a 5.7L Vortec V8 producing 255 hp and getting about 14 mpg. The 2007 has a base 5.3L Vortec V8 producing 295 hp and getting about 16 mpg in a lower-weight frame. See where the efficiencies went?

Better off? Worse off? GMAB. Pre-emptive straw manning. Of course you're worse off when prices rise. And better off when they fall. That applies whether you get 100 mpg or 10 mpg. A case can STILL be made that the whining is mostly that--and can continue to be made right up until people actually start voting with their wallets by giving up their 350 hp Urban Assault Vehicles for tin roller skates.

No one has stopped anyone from buying a tin roller skate that gets 40+ mpg (and had twice or more the accident death rate of, say, a minivan). If they so chose. People mostly just chose not to buy them, thereby enraging the greens. Now that gas has gone up they'll buy more of them--and more vehicles where the efficiency increases went into mileage rather than horsepower--and Detroit will get whacked on re-tooling costs as they shift to adjust. Just as they got whacked figuring out that people still wanted big cars as long as they could afford to drive them. Though Jeep seems to have figured it out by coming up with a couple high-mpg SUV's.

Although I suppose Congress actually passing a requirement to increase fuel efficiency (as a result of voter demand) might be an indicator.

Nothing like legislatures trying to repeal the laws of physics, eh? :-)

As I said, nothing stops people from buying high-mpg cars NOW. And relatively cheaply, at that. Demanding high-HP vehicles with high-mpg ratings is somewhat amusing. Any produced will come with price tags that wipe out the savings at the pump. And of course, higher accident death rates. Personally I'm getting a big laugh out of the same people who screamed for gas tax hikes now whining that their gas costs more.

Posted by: Tully at May 21, 2007 04:27 PM

I'll believe that people are actually feeling some pain when sales of SUVs start dropping.

http://www.google.com/search?q=suv+sales

Posted by: Justin at May 22, 2007 07:43 AM

Of course you're worse off when prices rise.

Thanks for conceding my point. :-) As for the rest, I won't be tricked into defending "greenies" or folks who talk out of both sides of their mouths. I don't know what I'm supposed to be straw-manning, pre-emptively or otherwise. I'm simply stating the obvious. This is middle school math, I think. :-)

My point remains that the large increase in gas prices over the past 3 or so years means that more people are experiencing some financial pain.

Irritation at the prices? Sure. But pain?

Well, the difference between irritation and pain is probably a function of your income or budget, as Tully pointed out by noticing that people keep buying big cars if they can afford them. If you are, let's say, upper middle class, and have a family income that approaches or surpasses 6 figures, your righteous indignation at $3 per gallon is really sort of an embarassment more than anything else....paying an extra $100 per month or so is pretty absorbable, unless you have a bunch of dependents .

But if you are around or below the median income, there's genuine pain, because the increase in fuel costs takes a much larger percentage bits out of your income, which had WAY less fat for discretionary stuff to begin with...

Tully, welcome to the minivan club. After totaling my truck, I acquired an old windstar as a hand-me-down from my sister. It's quite a piece of junk, but I really like the utilitarian features even though we don't have kids. I've spent years watching urban yuppie new-parent colleagues cringe at whatever the imagined symbolism of a minivan is supposed to be. They love talking themselves into the notion that it''s some sort of sellout to buy a vehicle that was carefully and thoughtfully designed to meet their needs.

I've always viewed vehicles as more of a means to an end, and the minivan is a pretty decent means to diverse ends.

Posted by: bk at May 22, 2007 09:35 AM

I wonder how much correlation there is between the mindset that makes one a centerist, and the mindset that views a vehicle as a "means to an end"? As opposed to a way to make a statement, show their status, etc.

Posted by: wj at May 22, 2007 09:45 AM

So, IOW, you're wondering whether centrists tend to be utilitarians?

I dunno. I think people do tend to pick their spots when it comes to whether to be utilitarian or more of an aesthete. It depends on means, too. The more means you have, the easier it is to be an aesthete. But in the main, for folks who only have the means to pick their spots, that's what you do. So maybe you drive a crappy car but buy a topnotch new guitar or golf clubs or computer or whatever. If you had ample means,. maybe you'd drive a BMW as well, but you wouldn't choose a BMW if it meant no guitar or hot tub or nice vacation...

The thing with utilitarianism is that you're more likely to impose it as a necessity. If you are intelligent enough to see your life as a situation wher you are required to make choices, utilitarianism just presents itself, doesn't it?

Posted by: bk at May 22, 2007 11:56 AM

wj, that's an interesting insight there. And spot-on.

I don't claim to be a "centrist," BTW. I think the term is only marginally useful, and is so ill-defined as to be little more than a political epithet used by ideologues. I'm a pluralist, a great believer in the process of democratic pluralism in a diverse society. Even when it produces results I might not agree with, if they're the product of the process they're likely to be workable compromises.

And not being an ideologue, I think strict adherence to ideology to extremes produces very poor results in a diverse society. It's (heh) ideotic....

Posted by: Tully at May 22, 2007 11:58 AM

I don't know what I'm supposed to be straw-manning, pre-emptively or otherwise.

You ad hominem insulted "economics folks," and assigned arguments to them. Yep, being an "economic folks," I'm picky about that. I haven't heard anyone make that argument about the current prices. Pre-emptive rebuttal of arguments not made is straw-manning. It's also back-door sneering at said arguments when they WERE properly made in the past.

So for all the economics folks out there who are ready to explain why we're better off

See? And frankly, as I noted, that argument of relativity can still be made--it just doesn't negate the obvious fact that if prices go up in real terms, you're worse off than you were when they were lower. Unless your income has gone up even more...but let's stay way from "basket goods" talk. But they're not mutually exclusive.

The argument you wish to ridicule is simply the statement that things aren't THAT bad, could be worse, and have been. Which is usually true whenever things aren't at penultimate suckage. (I promise not to break out in a Bobby McPheron song medley!)

I still don't recall hearing anyone (save oil producers) whining when gas was dirt-cheap in the '90s.

Yeah, I had a Jeep and a 'burb and I used them, and REALLY needed the 'burb, even if the Jeep was somewhat of a toy at times. Now I don't need that much hauling capacity, and the short-bed Caravan does me fine. This isn't hurt by having gotten it in prime used condition at an amazingly low price. If it had a coupla inches more ground clearance and four-wheel drive it'd be seriously close to perfect. Of course, then it'd be an SUV....

Posted by: Tully at May 22, 2007 12:16 PM

The argument you wish to ridicule is simply the statement that things aren't THAT bad, could be worse, and have been. Which is usually true whenever things aren't at penultimate suckage.

Yeah, that's it in a nutshell. I wish I had bookmarked the recent economic apologist-tinged article I had read a few weeks back about how certain comparative measures make things look better than they seem from the "adjusted for inflation" level. I suppose "apologist" is an ad hominem of sorts, but expressing "things are not as bad as they could be" DOES feel like that, right? It was really an ah-hah moment for me, as i read it thinking OK, now that the inflation-adjustment argument can not be used as consolation, here's the fallback...

I really wasn't trying to ridicule the argument, as you've characterized it. As you say, it's almost always true that "things could be worse." I certainly can't dispute that. My point was not so much that this view was mistaken, but that it doesn't provide folks with much consolation under current circumstances. I'm sure you can appreciate that, right?

IOW, while it's usually true that "things are not as bad as they seem," this perspective is not always a welcome one to use in the service of consoling folks. So when I was saying, "just don't do it" I was really counseling that economists use some discretion, keep their mouths shut, and let folks be steamed. Maybe it seemed like ridicule of the economics folks, but it was really just advice. :-)

I don't remember anyone complaining when gas was cheap either. But I'm not sure why you think we would have or should have. We were all glad not to worry about the cost of gas, at least most of us.

Posted by: bk at May 22, 2007 02:13 PM

Brian;

If you are, let's say, upper middle class, and have a family income that approaches or surpasses 6 figures, your righteous indignation at $3 per gallon is really sort of an embarassment more than anything else....paying an extra $100 per month or so is pretty absorbable, unless you have a bunch of dependents.

Now there's an interesting question. Do middle and lower class folks consider gas mileage in their auto purchases? Here in AZ I find it interesting that the first vehicle a recent immigrant buys once he's saved some cash is big pickup. We have lots of pick ups here in AZ. Totota used to be known for "little pick ups"; now their ads tout the BIG pickups. Hmm. (NOTE the preceding was all personal opinion and speculation. No scientific research was involved.)

Posted by: c3 at May 23, 2007 04:13 PM

Chris, I think most of us can agree that in the recent past (let's say 1985-2003 or so), only a smal lminority of car buyers have placed fuel economy at the top of their priority list.

Economics folks will tell you that the doubling in prices over the past 3 or 4 years WILL change this. So the right question to ask is not so much "have they?" or "do they?" but "will they?"

I know for myself that I am starting to drool at the Prius commercials advertising 60 MPG city.

Here in AZ I find it interesting that the first vehicle a recent immigrant buys once he's saved some cash is a big pickup. We have lots of pick ups here in AZ. Toyota used to be known for "little pick ups"; now their ads tout the BIG pickups.

IMO, the general pattern in car buying behavior is utility as defined by self-interest. People buy what fits their lifestyle and fulfills their emotional needs. I for one mourn the loss of the "small pickup." The only one that really qualifies as small these days is the Ranger and handful of others. This class used to be the midsized pickup, and not only is this the size small now, the ones in this class are beefier than past iterations. I saw a brand new Toyota TacK-oma (the correct speeling unleashes the sp@#ambot, go figure) the other day, and it's huge.

I am all for utility, but a quick walk around any mall parking lot will show you that, what, 1/2 to 2/3 of guys buying pickups for their utility simply used this idea to help them talk themselves into the $35,000-$45,000 toy. I like to check the beds of big trucks to see if the owner is actually using their truck to truck things, or if instead its just a big shiny shlong extension.

Sadly, my research suggests that many of these big trucks are analagous to the boss who demands he have the most powerful computer, and then uses it only to check his email. Unused trailer hitches. Offroad and 4WD packages on trucks that never leave asphalt. Pristine beds.

Is this more of an east coast phenomenon, or do you see it out in AZ? Personally, I'd be ashamed to drive a pick-up that didn't have a few scratches in its bed and a residue of dirt, chips, grit, etc. But around here, it seems most guys don't see it that way. They just want a elevated commander's seat on the bridge of a 450 HP Enterprise.

I've got to guess that among both immigrants and other blue collar folks out west with big pickups, they USE that utility.

Posted by: bk at May 24, 2007 09:53 AM

ROTFL! Spot on, Brian. I see a lot of those "virgin" pickup trucks in Missouri and Kansas. (Yes, I see a lot of pickup trucks that get good use too, but those are mostly owned by farmers and/or hunters, not the "Hey, this'll convince everybody I'm a regular guy!" crowd.)

As I've said before, my ex-hippie high school history teacher lived in fear when he first moved to Missouri, because he'd seen "Easy Rider", and he thought every pickup truck driver was a potential murderer ready to shoot hippies on sight. I didn't have the heart to tell him he was perfectly safe--inless he happened to pass by a pickup truck just when the driver was tossing an empty beer can out the window. ;-)

Posted by: Blue Jean at May 26, 2007 03:38 PM

ROTFL! Spot on, Brian. I see a lot of those "virgin" pickup trucks in Missouri and Kansas. (Yes, I see a lot of pickup trucks that get good use too, but those are mostly owned by farmers and/or hunters, not the "Hey, this'll convince everybody I'm a regular guy!" crowd.)

As I've said before, my ex-hippie high school history teacher lived in fear when he first moved to Missouri, because he'd seen "Easy Rider", and he thought every pickup truck driver was a potential murderer ready to shoot hippies on sight. I didn't have the heart to tell him he was perfectly safe--inless he happened to pass by a pickup truck just when the driver was tossing an empty beer can out the window. ;-)

Posted by: Blue Jean at May 26, 2007 03:38 PM

Yikes! Sorry about the double post. I'm in bed with a mysterious virus and it won't let my fingers do the talking.

Posted by: Blue Jean at May 26, 2007 03:39 PM