By Bob Lowry
But, for now, the low prices are a tremendous boon to most of us. In its own view of reality Wall Street doesn’t seem to like the fact we are saving billions of dollars. Some industries are adversely affected. The state of North Dakota is not happy. But, for the typical American (and world-wide consumer) we have extra money to spend or save.
Now, to the point of the post. While not a stampede, car buyers are beginning to exhibit the same behavior that has happened before when there was a temporary drop in prices at the pump: bigger cars and SUVs are selling while hybrids and sub compacts are lingering longer on the lot.
It is as if people have collectively lost their long term memory. It is as if we have this strange mental fog that forgets that prices that go down always go back up again. The Giant SUV that seems so cool today with gas at $1.80 a gallon becomes a boat anchor that sucks away big chunks of the family budget when the prices rises back to $3.00 or more a gallon.
Gas is made from a finite resource that is also a potent force when those outside our control decide to use it as a political hammer. The result: gas is used as a weapon of control or coercion.
With the Super Bowl happening this weekend here is an analogy we can relate to: The team that wins celebrates for a few days, they are in a parade, and everyone in their hometown is proud and happy. But, one week later that team is right back where it was before the start of the season: at 0-0 with absolutely no guarantee this year’s wins will translate into success next season. Many of the same players will not even be back next year. No sports fan believes that because of the win in Glendale on Sunday there will be no changes in next year’s standings or outcomes. Today’s situation doesn’t guarantee tomorrow’s outcome.
So why do we seem to believe that low gas prices today mean low gas prices forever? That somehow the drop of the last 6 months is permanent and the future will hold no unpleasant surprises? That buying a large car with poor gas mileage is a smart choice? That saving money by continuing to drive small cars or hybrids is not an appropriate choice?
Collective amnesia? I have no explanation.