I know I'm a repetitive bastard, but I can't help myself...
From Charlie Wheelan's latest Yahoo Finance column:
(The whole article is worth reading by the way...)
Quote:
Gas prices are at $4 a gallon and still headed north.
So far, the obvious things have happened: SUV sales are plummeting, airlines are mothballing gas-guzzling planes, Americans are driving fewer miles for the first time in modern history, and mass-transit ridership is growing everywhere.
That's pretty much what economics would predict. When something gets more expensive, people try to avoid the pain. The best way to avoid the pain of higher gas prices is to use less of it.
I will add, perhaps gratuitously, that the behavioral changes we're seeing now are exactly why we should have implemented a carbon tax (with offsetting income tax or payroll tax cuts) 10 years ago. Given that we have to raise revenue somehow, we ought to do it by taxing behaviors that we would prefer to discourage. An income tax discourages work; a carbon tax discourages pollution. Which one makes more sense to you?
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"The Constitution only gives people the right to pursue happiness. You have to catch it yourself." - Benjamin Franklin
"Government is the great fiction, through which everybody endeavors to live at the expense of everybody else." - Frederic Bastiat, Essays on Political Economy, 1872
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