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Gas Prices – The Silver Lining of the Recession

by Debt Destroyer on November 20, 2008

I saw something tonight that I didn’t think I ever would see again.

Gas under $2/gallon.

gas-sign

This summer when we were paying $4/gallon, it was just understood that high gas prices were here to stay.  With rising demands from China & India we needed to get used to paying these kind of prices.  People traded in their gas guzzlers for hybrids.  Others bought scooters.

Then the economy tanked and “cheap” gas is back.

It’ll be interesting to see if people maintain their new conserving ways or will they revert back to old habits where mpg was an after-thought?

History shows us that when the gas lines of the 1970s retreated, they took the fad of the “little car” with them.  I for one hope that we don’t return to our old gas guzzling ways.

Don’t get me wrong, I prefer paying the lower prices.  But if we truly want to cut our dependency on foreign oil, we need to increase our vehicles’ fuel efficiency.

It’s ironic then that the Big Three automakers are being raked over the coals in Washington (as they beg for a bailout) for not producing vehicles for a $4/gal world, when we are no longer in that world.

I also find it ironic that, according to the news, if it wasn’t for the credit crunch (which our trusty financial institutions helped create and were bailed out for doing so) that the automakers would be still OK.  But their own bail-out isn’t looking as promising.

Sometimes I can’t tell if irony is supposed to be funny or sad.

For those of you employed by the auto industry, I sincerely hope you are able to weather this storm.  Speaking as someone who was recently laid off, it’s not fun. But it’s not the end of the world either.

Hopefully this historic industry doesn’t become history itself.

I don’t think it will.

What about you?  How long do you think “cheap” gas will be around?  Do you think we changed our ways?  Do you think The Big 3 will make it?

Until next time,

-DD

{ 15 comments… read them below or add one }

Ray Merkler November 20, 2008 at 9:23 am

This is definitely temporary. Maybe prices won’t get as high as they were before, though. It felt a little artificial once gas hit the $4 mark, but the current prices feel similarly artificial.

Just like the rest of the economy, this turbulence is the result of too much government intervention in public affairs. The best thing the government can do right now to fix gas prices and the economy as a whole is to stop trying to fix them. Once people are left to do what they will, prices will stabilize.

I have a feeling that won’t happen. Though I identify more with the philosophies of the Democratic Party, they *are* pretty law-happy. But we can’t count on the Republicans to help us, either, because they’ve long abandoned their old small-government ideals.

Huh, I derailed a little there.

Summing up, buy a bike or a pair of skates.

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Budgets are Sexy November 20, 2008 at 6:13 pm

That is the SEXIEST thing i’ve read all day!!! and makes my decision to switch to a gas guzzlin’ cadillac that much better….until it starts to go up 😉

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The First Creditor November 20, 2008 at 9:42 pm

Yeah I have to agree, that is pretty sexy. The lowest I’ve seen in my area is 2.22, but I’m still pumped (haha).

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shela November 20, 2008 at 10:05 pm

How long do I think “cheap” gas will be around? Not very long, because of longer detours around Somalia due to the recent increase in piracy on the high seas. Do you think we changed our ways? Americans change their ways? You MUST be joking! Do you think The Big Three will make it? I rather doubt it, they are not innovative enough or nimble enough to change with the times, and they do not plan for the long term — just like Americans in general these days.

I have long hoped that the Big Three would make changes to their fleets, to start making sound business decisions for the long term and to produce vehicles that are more fuel efficient — only to be disappointed time after time after time.

I have stock of a car company in my retirement account, but it isn’t one of the Big Three. It’s Toyota. I read an interview of a company officer who said they plan for viability in 200 to 300 years in the future. Now that is long-term planning, and the company is a leader in producing fuel-efficient vehicles.

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Jeff November 21, 2008 at 11:17 am

I actually just wrote a post about this on my own blog. It’s hard to know just where to stand on the bail-out for the big three. I feel like they have brought it upon themselves in a way, but I also feel for the millions of people that would be adversely affected if they were to just go away should the bail-out not happen.

Personally, I would like to see congress take a stand and start making the CEO’s of these companies take responsibility for the mess they’ve gotten themselves into. As an American tax-payer, I am tired of paying for the mistakes made by greedy CEO’s.

As for the “small car” trend, I heard on the news the other day that the sale of large SUV’s is on the rise. It makes me sad because you know that once gas prices spike again (because they will, let’s just be honest about it) these poor people aren’t going to be able to afford to drive. But I suppose that’s spirit of consumerism in the U.S.

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ChristianPF November 21, 2008 at 12:56 pm

I am not really sure how long it will be around, but I am really enjoying it right now! $16 to fill up my tank is fun!!

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Debt Destroyer November 21, 2008 at 5:08 pm

What makes this even better, or “sexier” is that that same sign today is showing $1.89.

And another station in town is selling gas for $1.75!

I’ll leave with a little Neil Young ~ “Got fuel to burn, got roads to drive.”

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Tight Fisted Miser November 22, 2008 at 10:43 am

It has been under $2 for over a month here in KC. It was $1.49 when I checked yesterday. The gas prices dropped really quick. In October I posted about gas prices going under $3 and just a couple weeks later they were under $2.

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The Happy Rock November 22, 2008 at 10:55 am

@TFM – WOW. 1.49 that is dirt cheap! I thought NJ was cheap with $1.77 yesterday.

Shame our stock market is down at 7,500-8,000 to help it gas prices drop.

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Funny about Money November 23, 2008 at 4:49 pm

I suspect people will continue to conserve, at least for a while, because times are pretty tough. Cheaper gas doesn’t mean a lot when you don’t have a salary to buy it with, anyway.

A friend who works at a Toyota dealership reported that last week the entire HUGE dealership–previously one of the most active in North America–sold three cars. One of ’em was used.

That doesn’t sound like Happy Gasoline Days are here again.

Economists are fretting that prices of food and gas are dropping, and saying this adds to the country’s woes. But for those of us who have lost our jobs or are about to lose them and not enough left in our 401(k)’s to help, that may be the difference between scraping by and not surviving at all.

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Jessie November 27, 2008 at 8:38 am

Enjoy Cheap Gas While It Lasts!

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Slow Computer November 27, 2008 at 9:28 am

The drop in gas might be the most obvious drop in prices. But in a recession all commodities drop in price. Also food prices having been dropping quite a bit.

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Pete at Nissan GTR Canada January 22, 2009 at 12:44 am

I’m not sure why gas prices are such a big issue with most people? I pay pennies for gas when compared to insurance cost, though that may just be in my region.

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Niceguy May 5, 2009 at 9:25 am

I’m sure glad gas prices have come down.

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Spencer Baxter May 26, 2009 at 6:29 pm

Unfortunately, don’t believe cheap gas prices are here to stay for long. Already topped 2.30 in most states and probably go to 3.50 by year end. Wish the cheap gas prices would settle at 1.25 but that is a wish.

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