Singing the gasoline blues

Submitted by adam ricketson on Wed, 2007-05-23 14:46.

Cross-posted to Daily Kos

Gasoline prices rise every summer, but this year they are even higher than last year. As if the high prices weren't annoying enough, we can look forward to massive displays of ignorant indignation from many of our countrymen. These theatrics typically come from those who can't be bothered to even read an economics blog, yet still prescribe decisive economic intervention on every issue imaginable.

I am pleased to find some reasonable pundits who appreciate of how markets work even more than corporate apologists do. It's even better when these pundits promote productive conversation about important issues. This stands in stark contrast to the knee-jerk legislation that just passed the House, attempting to start a massive diplomatic and economic dispute with OPEC.

Unfortunately, it's times like this that people call for a decrease in the gasoline tax, even though gasoline taxes may be the best tool that we have to manage our relationship with OPEC. Opponents of the gas-tax also seem to ignore the fact that there soon will be no money to build new highways (which may actually be a good thing), not to mention the gas tax's role in recovering pollution costs. Furthermore, a short-term reduction in the gas tax would transfer a good chunk of those lost tax revenues into oil-company pockets: prices may stay high if suppliers are unable to produce additional gasoline on short notice, and they wouldn't fall the full amount if decreases in prices discourage conservation by consumers.

If any SUV-driving suburbanite whines about the cost of gasoline and tries to make it into a political issue, I have two pieces of advice:

  1. Ride a bike(again, good discussion)
  2. If you don't like the market, leave it!
There is no reason (at the moment) to believe that anything unfair is going on, except in the collection of economic rent (from oil deposits or grandfathered pollution rights at oil refineries)

 

In related news: Iranian motorists start paying 25 percent more for fuel.

qualify "good thing"

#3824 On Wed, 2007 05 23 19:26 nonluddite said,

"Opponents of the gas-tax also seem to ignore the fact that there soon will be no money to build new highways (which may actually be a good thing)"

Is that a "there will be more (or all) toll roads" "good thing" or a "cars are killing the Earth" "good thing".

The American Civil Liberties Union—Protecting the Bill of Rights…except for Amendments 2, 9, and 10!--nonluddite

another effect

#3825 On Wed, 2007 05 23 20:35 Tangeng said,

people start avoiding driving since it means sitting in traffic.

but I think all three are "good things," even if I don't think cars are killing the earth.

make me think

#3831 On Thu, 2007 05 24 17:20 adam ricketson said,

Hmm... at the moment, it was just the first impression that came to mind, without a specific rationale for it--that's why it's parenthetical.

Anyway, I'm mainly concerned with how highways promote a car-centric society...and what that means for people who don't own cars -- whether because of a lifestyle choice, physical inability to drive, or lack of money. I'm not against highways per se, but I do believe that we have built a lot more of them than we rationally need, and I believe that this middle-class subsidy has consequently hurt a lot of poor people and wed us to an unsustainable economic system.

"promote" a car-centric society

#3832 On Thu, 2007 05 24 18:29 nonluddite said,

"highways promote a car-centric society and what that means for people who don't own cars"

I don't follow. Aren't highways paid for by gas taxes from people who drive cars? Isn't that another way of complaining that people drive, period?

It's like you are complaining that highways are being funded by transit fees!

Now if you were complaining about the politics of highway pollution, placement, or traffic flow, I'd be with you, hence my advocacy of toll roads.

The American Civil Liberties Union—Protecting the Bill of Rights…except for Amendments 2, 9, and 10!--nonluddite

car-subsidies and highways

#3837 On Fri, 2007 05 25 07:45 adam ricketson said,

The government is involved in so many aspects of our economy, that it is pretty hard to tell what the net effect of state policies are. For example, the gasoline tax is used to subsidize mass-transit, so does that mean that the government discourages car use?

I believe that, in total, the state does subsidize car use, thereby promoting a car-centric society. Before I get to the meat of my reasoning, i want to address mass-transit subsidies. By themselves, these do discourage car use in favor of mass-transit use. However, mass transit systems still operate according to what we might call the "automobile paradigm"--like cars, they are capital intensive systems designed to move large amounts of cargo over long distances at a high speed. This is in contrast to the "pedestrian paradigm", in which people go on small daily trips, carrying small loads, without requiring a large capital investment.

Our settlement patterns are determined by which paradigm we adhere to. Mass-transit and automobiles will produce similar settlement patterns, and that pattern will effectively prohibit transporation according to the pedestrian paradigm. So my point is that mass-transit subsidies don't really challenge the car culture; in fact, mass transit is typically meant to complement a car-based system, not replace it. 

With that said, let's return to the issue of highway funding. In a general sense, the gasoline tax as highway funding can be seen as a user fee, and doesn't imply that drivers are getting any type of subsidy. Furthermore, if you account for the wasteful (political) allocation of those funds, we could say that drivers are getting screwed by this system.

Darn, gotta go.

P.S. : A substantial portion of highway funding also comes from general taxation.

suburbs

#3841 On Sun, 2007 05 27 00:21 nonluddite said,

"in fact, mass transit is typically meant to complement a car-based system, not replace it"

Overall good stuff, but I think this statement has a chicken-and-the-egg problem--mass transit was in use WAY before the automobile was invented (if not when they were ubiquitous). In fact, they talked about "streetcar suburbs" in The End of Suburbia, which I though undermined their thesis that suburbs wouldn't exist in the future without oil.

The American Civil Liberties Union—Protecting the Bill of Rights…except for Amendments 2, 9, and 10!--nonluddite