The conservative function of price

With the price for a gallon of gasoline now over $3, and likely headed towards $4/gallon before too long (of course, nothing is ever for certain with commodities, at least in the short term), no doubt people who own--usually in partnership with their bank--SUVs and large pickup trucks are getting nervous. Who can blame them? There's nothing like filling up with $70+ worth of gasoline every week or two to make one start rethinking his transportation needs.

There was a time when it seemed like practically every second vehicle on the road was large and held a big engine. In my area, it still seems that way, but I think it's just due to past momentum. If what I've noticed at a small, local used car lot is any is any indication (see photo), I think the message may finally be filtering through to folks that the overall trend in gas prices is ever upward and vehicles with cavernous interiors and thirsty power plants drain too much discretionary capital. The idea of the low-mileage big vehicle was supported for years by cheap, abundant (those two words go well together in a [relatively] free market) oil, but it can now no longer support itself, at least by those without deep pockets.

What we are beginning to see today is the first manifestation of a principle in economics known as the conservative function of price. Gas prices are rising, so this catches the public's attention and more effort is made to use gas wisely. People, eventually, tend to act rationally when faced with economic choices which they cannot evade and change their behavior.

This change won't happen overnight, and my small sample of one local, independent car lot does not a national trend make, but for the purposes of this blog post, I am going to extrapolate what little information I have anyway. The photo above does not show very well all of the vehicles on the lot, but I can tell you that about 90% of them are full-size trucks and SUVs. I can also tell you that in the past the ratio was 40% large to 60% small/medium vehicles on that lot. The fact that so many large vehicles with robust energy appetites are available tells me that they are less popular than they used to be. Slowly, the smaller, fuel-efficient car is looking better and better to the average American, especially when faced with the equally distasteful choice of paying a large fuel bill or walking.

Take care.

DAL357

The cutie and comeuppance

The 'Net's been filled with stories over the last few days about now-former New York governor Eliot Spitzer's imbroglio with a top-dollar call girl (pictured) and his subsequent resignation. I don't really have much to add except that it's really sweet watching this poster boy for hypocrisy, one who has put so many people behind bars as a prosecutor for breaking what are often unconstitutional laws in the first place, twist in the wind. I can only hope that if it is proven that he used public monies for his trysts, he will spend time in prison with some of those same folks he helped put there. I won't go so far as to say that if this comes to pass that I hope he is violated sexually while in the pokey, no doubt as some of his victims have been, but that would be poetic justice.

This is the type of behavior and arrogance you get, folks, when government is peopled with career bureacrats/politicians.

Take care.
DAL357

Now, let's get back to digging that hole we're in.

As you may have heard, Ron Paul is now officially out of the 2008 presidential race, although some would say he was out before he even started. But those same people who might say that are also the same who will vote for either the Republican or Democrat party candidate and expect things to be miraculously different. The only person I'm aware of who actually offered substantive change to the American people, as opposed to just mouthing the word, was Ron Paul. Now that he is out, we can really get down to the business of business as usual.

Not that this surprises me. Americans are fated to follow their present course to its inevitable conclusion: a totalitarian state that mandates and directs practically all facets of life. Heck, we're already well on the way there as it is.

But what happens once we get there, be it in one generation or three? Somewhere down the line, people will realize that the government is made up of nothing more than people, people who can no more circumvent the laws of reality than any individual can. Those who are naive enough to believe a politician's/bureaucrat's promises/lies in exchange for ever-more helpings of their liberty/sovereignty will be bitterly disappointed when they find they have nothing left to give and they are getting a whole lot less than they bargained for. Unfortunately, I think this is the depth the American people will need to sink to before they start looking for true alternatives, not the same old pig with a new makeover.

If it comes to pass, perhaps the financial superstorm that appears to be looming just over the horizon will finally disgust Americans enough to jettison the two main parties (who are looking more and more the same to me every passing year), and embrace, however tentatively, a new approach. This is probably a wildly optimistic hope, but it's one which I still cling to.

Given their past history of behavior, though, I believe the more likely reaction to an economic catastrophe by American voters will be to clamor for more of the same poison that got them into the situation in the first place--government intervention in the economy. This is akin to a junky trying to kick his habit by taking more dope. Sure, they'll feel better for a bit, but when the temporary high is over they'll find the pit they're in has only grown deeper. Eventually, the junky will have to wise up, grow a backbone, realize that life encompasses both pleasure and pain and that it's not one long laugh-fest, and knock the monkey off of his back or he will die. Ditto the American public.

It takes a lot of moral character and courage (and a dollop of intelligence) for an epochal event like that to happen with a people, and I'm not so sure the aggregate of the American population is up to the task. You have no idea how wrong I hope I am.

Take care.
DAL357