I know exactly how you feel. We Americans are completely unaware of how wealthy we are--wealthy enough to spend multiple tens of thousands of dollars on a car that sits idle in a garage for 10 hours a day, only to sit idle in a parking lot for 8 more!
Higher fuel prices are going to cause major problems, and I'm really not looking forward to it. And yet, certain little annoyances like those that you point out, are actually going to get better. I don't know what gas price will get Americans to carpool--I doubt if $4 will do it, but maybe $8 will.
Having a bit of sanity creep in--smaller cars, better mass transit, less space devoted to parking lots, fewer acres going to new exurb housing developments--won't make up for the pain, but at least in my imagination, there's a little satisfaction there.
What makes the gas costs and transportation considerations sting all the more is that my workplace is moving to the 'burbs from the city.
A 20 minute bus commute is turned into over an hour since I will have to transfer--OR--I could walk 9 blocks (not a good plan when winter hits Syracuse!) to get on a direct bus. The worst part is- work is moving only 4 miles away from my home- but out of the city. Same distance but less "efficient."
All the other co-workers are so excited about having free parking in the new place versus having to pay for downtown parking. Most of them are ADDING distance to their commute, but they are only looking at the short term savings.
It just drives me crazy to see so many people (1000+) drive their cars to have them sit all day. Such a waste. And I certainly would not leave my stay at home hubby without the car- she needs it for the 4 kidlets and running our home. I don't need it to sit in the parking lot while I sit in a cubicle!
I am the only person looking to carpool (I finally found a prospect!). Is that a sad commentary or what?
I actually was already considering this recently, and dropped the money on a nice new bike last night. I decided biking was a change I needed to make for myself NOW so I can get used to it WHEN what you've outlined has happened. I guess I'm a pessimist, but I prefer to think of it as forward thinking.
The reduction sounds great in principle, but what if the tax is lifted, and tomorrow morning there is some kind of 'barge fire' or it's Bring Your Child to Work Day at the Refinery (anything to create a 'slowdown' in production.) And gas prices go up 18 cents?
What the hell would McCain do? It would essentially take about $9 billion out of the tax cofers and put that money directly into the oil companies hands. And the American consumer gains nothing!
Is big oil that brazen? It would take some guts to do it, but with the media behind them covering every supply scare from refinery fires to the payroll girl getting a hang nail at Exxon, it's possible.
If you point your mouse at the picture, your browser will probably show you the caption for it: "Last Year's Gas Prices."
I took the photo to illustrate an earlier post on a related topic. I thought about going out to get a fresh photo, but that station (which is within walking distance of my apartment) just changed hands and is in the middle of changing their sign, so it's all confused-looking just now.
Then, once I thought about it, I decided that having last year's prices up kind of helped make my point. So I went with the old picture.
You're exactly right. Doing the analysis correctly involves calculating the net present value of the cost savings of each of the future fill-ups, and comparing that sum to the net capital investment of the new car (including financing costs).
My main point is that the simple-minded analysis assumes that gas prices going forward will be similar to gas prices today, whereas I think gas prices in the future will probably be quite a bit higher. That changes the break-even point for investing a new car, but it doesn't change the nature of the calculation.
It depends a great deal, of course, on how long your car is going to last. My wife's Honda Civic has lasted 18 years--I hope you have similarly good luck with yours!
I am going to have to agree with Joshua on this one because when you look at your list # 2 & # % contradict themselves, when you start turning down people on section 8 just because they are on section 8 you will have a lifetime of legal battles (civil rights claims) to be exact and fairhousing claims than carter has pills because this "IS" discrimination. Check your laws and you will find that what I am stating here is true. So you might want to think about removing that #2 or replacing it with a better option.
Same think happened here in the UK, there wasn't enough space on most of the forecourt displays to put 100.00p as opposed to 99.99p. Anyways 'petrol' over here is now about the the equivalent of $10 per gallon, and you think $4 is bad!
We haven't been following this as closely as I'd like, but we try to get 3 things for the food bank bin every week. I'd called the food bank to ask what things they need most, so we focus on those items when they're on sale. I don't spend more than two dollars a week, but I know that people need the food bank all year round, and anything I can give is better than nothing.
Hi. I'm writing because I call the hospital that stated I owe $148.00. It was back in December 1999. Now I was suppose to be cover under medicade during that time, but obviously I wasn't. They stated that they didn't pay for my visit because my maternal lead was up in July. I had my daughther in March 1999. They did not notify me that I was no longer under medicade. I had more complications after my pregnancy. Well when I visit the hospital they ran my card and told me that my payment was only $3.00. Now 8 years later they tell me I owe $148.00 which Medicade was suppose to pay for the bill. Well she stated that I was no longer on medicade at that time. I call the collection agency and told them the same thing that I'm telling you. I ask her can I dispute this because I didn't think it was right that I didn't receive any calls or letters to notify me about this balance. She told me I could but it will remain on my credit file as disputed this transaction. Should I automatically let it go off my credit report because it has been 8 years? Did I open this account back up for another 7 years because I ask could I dispute this account? What would you do?
Yep--entirely understandable. With some insight into the situation, though, it's now possible to turn the logic around. The most reasonable thing to do now is to invest capital in future energy savings. If (as I suspect) the current energy prices will look cheap five years from now, this is a great time to use our still-cheap energy to make permanent reduction in future energy use. I talked about that in a post called Fix energy in tangible form. (One of my less appreciated posts. Not a catchy title, I guess.)
I know exactly what you mean--it's easier to say "find a job closer to home" than it is to do. But looking out five years, which is what this post is about, there's enough lead time to make that sort of change, if you plan for it. Even pretty major changes, such as going back to college to get a degree, can be squeezed into five years.
that's strange, because i signed up for Avenu as i prepared this post to see if it would yield any extra savings, and i did not see those. now i want to try again. i really want granola bar coupons!
Nice Job, Phil, mixing the Macro and Micro but one question. Just where the heck did you find that picture and that Speedway gas station with prices that &%$@! low?! LOL:) You know what the *&&%$@!#$ I would do to pay $2.86 for gas?! This is a personal finance site so I can't tell you lest I incriminate myself. LOL:) Where I live, regular, yes I said regular unleaded is just under 4 Samolians! And that's on a good day. What's sad is nobody is going to stop consuming, especially not Gas. We never think about it but we're building towers in Dubai with what we're doing. After all, even when economies are down someone is always making money can you say GULF STATES, and I ain't talkin' Alabama and Wezzyana either.
There are whole business strategies in the United States and in the global economy that are based on cheap energy. By removing that as a constant element we are bound to see some significantly destabilizing effects on economic structure in relation to the status quo.
One case would be big box stores, which require very long supply lines, just-in-time supply lines fed by diesel trucks, and personal commuting to the big box stores to enable the mass consumption that sustains that particular business model.
Another case would be the way we presently do agriculture, which requires large fossil fuel inputs like fertilizers, pesticides, processing, packaging, and in many instances, long distance transportation of the final products. Like you said, we're already seeing pressure on any markets that are vaguely connected to petroleum. Biofuels are implicated in price increases in food and if plug in hybrids take off... there could be significant impact on the price of electricity if it's not done right.
There are many personal decisions one can make to reduce one's carbon footprint/exposure to rising energy prices: live closer to the city in denser housing - less energy per unit is used for heating and cooling and it is easier to access local goods and services and employment opportunities without a car.
There needs to be more action from the Federal government to make energy smart decisions like these more feasible for larger parts of the population. More funds for mass transit construction would be good, and incentives for investing in central cities and inner ring suburbs would be great too.
Philip, this is a great post in that it gets people thinking long-term. By providing some actual questions people might want to consider, you help convey the reality of the situation.
My question is this though: If it's a wise decision to buy a smaller, more fuel-efficient car, then how much of that gas savings is offset at the price of paying off a new (or used) car? For example, I drive an '02 Civic that's been paid off for over a year now. I'm fortunate that it gets good gas mileage, but even if it didn't, I wouldn't necessarily want to take on new car payments just because I wouldn't have to fill up the tank as much. Does that make sense?
Same goes with trying to move closer to work. Maybe the commute would be shorter, and travel options other than driving are viable, but would it be worth it if your mortgage or rent payments went up?
I guess what I'm trying to get at is the long-term cost trade-off. Less gas, new car payment. Less gas with shorter travel time, but more expensive mortgage payments.
Yes, we only need 3 knives, but a steel or stone is needed to keep them sharp!
Instead of a double boiler, use two pots: put the chocolate, or whatever, into the smaller pot and put the smaller pot into a larger pot filled with boiling water.
I'm with you -- I don't see a Mad Max apocalypse looming, but I do think people will need to adjust their lifestyles to factor in energy costs.
It's understandable that a lot of consumers made capital purchases based on cheap energy. A large house far outside a city is a good value in a dollars/sqft sense when commuting costs are insignificant. And a large SUV is cheap in a dollar/(lb of vehicle) sense, too, when fuel is the least expensive part of owning a car. People just have to get used to the idea that energy costs something and needs to be factored in.
There was a time when a middle class person could buy a home in New York City. That time is long gone; people expect that if you live in NYC you will rent unless you are very wealthy. Southern California is heading this way. People accepted that a small apartment was part of the proposition of living in NYC, and life went on. Extra space in cars and homes will become an increasingly expensive luxury, and consumers will need to adapt.
@ DivaJean:
I know exactly how you feel. We Americans are completely unaware of how wealthy we are--wealthy enough to spend multiple tens of thousands of dollars on a car that sits idle in a garage for 10 hours a day, only to sit idle in a parking lot for 8 more!
Higher fuel prices are going to cause major problems, and I'm really not looking forward to it. And yet, certain little annoyances like those that you point out, are actually going to get better. I don't know what gas price will get Americans to carpool--I doubt if $4 will do it, but maybe $8 will.
Having a bit of sanity creep in--smaller cars, better mass transit, less space devoted to parking lots, fewer acres going to new exurb housing developments--won't make up for the pain, but at least in my imagination, there's a little satisfaction there.
You bet--I also bicycle for transportation. In fact, Frugal transport--bicycling was the second post I wrote for Wise Bread.
It's possible that sailing ships or canal barges are more efficient than bicycles, but it's a near thing--and nothing else even comes close.
What makes the gas costs and transportation considerations sting all the more is that my workplace is moving to the 'burbs from the city.
A 20 minute bus commute is turned into over an hour since I will have to transfer--OR--I could walk 9 blocks (not a good plan when winter hits Syracuse!) to get on a direct bus. The worst part is- work is moving only 4 miles away from my home- but out of the city. Same distance but less "efficient."
All the other co-workers are so excited about having free parking in the new place versus having to pay for downtown parking. Most of them are ADDING distance to their commute, but they are only looking at the short term savings.
It just drives me crazy to see so many people (1000+) drive their cars to have them sit all day. Such a waste. And I certainly would not leave my stay at home hubby without the car- she needs it for the 4 kidlets and running our home. I don't need it to sit in the parking lot while I sit in a cubicle!
I am the only person looking to carpool (I finally found a prospect!). Is that a sad commentary or what?
I actually was already considering this recently, and dropped the money on a nice new bike last night. I decided biking was a change I needed to make for myself NOW so I can get used to it WHEN what you've outlined has happened. I guess I'm a pessimist, but I prefer to think of it as forward thinking.
The reduction sounds great in principle, but what if the tax is lifted, and tomorrow morning there is some kind of 'barge fire' or it's Bring Your Child to Work Day at the Refinery (anything to create a 'slowdown' in production.) And gas prices go up 18 cents?
What the hell would McCain do? It would essentially take about $9 billion out of the tax cofers and put that money directly into the oil companies hands. And the American consumer gains nothing!
Is big oil that brazen? It would take some guts to do it, but with the media behind them covering every supply scare from refinery fires to the payroll girl getting a hang nail at Exxon, it's possible.
@ Guest:
If you point your mouse at the picture, your browser will probably show you the caption for it: "Last Year's Gas Prices."
I took the photo to illustrate an earlier post on a related topic. I thought about going out to get a fresh photo, but that station (which is within walking distance of my apartment) just changed hands and is in the middle of changing their sign, so it's all confused-looking just now.
Then, once I thought about it, I decided that having last year's prices up kind of helped make my point. So I went with the old picture.
@ Barbara:
You're exactly right. Doing the analysis correctly involves calculating the net present value of the cost savings of each of the future fill-ups, and comparing that sum to the net capital investment of the new car (including financing costs).
My main point is that the simple-minded analysis assumes that gas prices going forward will be similar to gas prices today, whereas I think gas prices in the future will probably be quite a bit higher. That changes the break-even point for investing a new car, but it doesn't change the nature of the calculation.
It depends a great deal, of course, on how long your car is going to last. My wife's Honda Civic has lasted 18 years--I hope you have similarly good luck with yours!
I am going to have to agree with Joshua on this one because when you look at your list # 2 & # % contradict themselves, when you start turning down people on section 8 just because they are on section 8 you will have a lifetime of legal battles (civil rights claims) to be exact and fairhousing claims than carter has pills because this "IS" discrimination. Check your laws and you will find that what I am stating here is true. So you might want to think about removing that #2 or replacing it with a better option.
Same think happened here in the UK, there wasn't enough space on most of the forecourt displays to put 100.00p as opposed to 99.99p. Anyways 'petrol' over here is now about the the equivalent of $10 per gallon, and you think $4 is bad!
We haven't been following this as closely as I'd like, but we try to get 3 things for the food bank bin every week. I'd called the food bank to ask what things they need most, so we focus on those items when they're on sale. I don't spend more than two dollars a week, but I know that people need the food bank all year round, and anything I can give is better than nothing.
Hi. I'm writing because I call the hospital that stated I owe $148.00. It was back in December 1999. Now I was suppose to be cover under medicade during that time, but obviously I wasn't. They stated that they didn't pay for my visit because my maternal lead was up in July. I had my daughther in March 1999. They did not notify me that I was no longer under medicade. I had more complications after my pregnancy. Well when I visit the hospital they ran my card and told me that my payment was only $3.00. Now 8 years later they tell me I owe $148.00 which Medicade was suppose to pay for the bill. Well she stated that I was no longer on medicade at that time. I call the collection agency and told them the same thing that I'm telling you. I ask her can I dispute this because I didn't think it was right that I didn't receive any calls or letters to notify me about this balance. She told me I could but it will remain on my credit file as disputed this transaction. Should I automatically let it go off my credit report because it has been 8 years? Did I open this account back up for another 7 years because I ask could I dispute this account? What would you do?
Thank you,
Guest
@ Kevin:
Yep--entirely understandable. With some insight into the situation, though, it's now possible to turn the logic around. The most reasonable thing to do now is to invest capital in future energy savings. If (as I suspect) the current energy prices will look cheap five years from now, this is a great time to use our still-cheap energy to make permanent reduction in future energy use. I talked about that in a post called Fix energy in tangible form. (One of my less appreciated posts. Not a catchy title, I guess.)
@ Ronni:
I know exactly what you mean--it's easier to say "find a job closer to home" than it is to do. But looking out five years, which is what this post is about, there's enough lead time to make that sort of change, if you plan for it. Even pretty major changes, such as going back to college to get a degree, can be squeezed into five years.
that's strange, because i signed up for Avenu as i prepared this post to see if it would yield any extra savings, and i did not see those. now i want to try again. i really want granola bar coupons!
@ Ritab and Grampa Ken:
On the topic of cars in particular, I wrote a post a while back called Better cars are not the answer, which is on-topic to your comments.
I LOVE TANNING!!!!
I LOVE TANNING!!!!
Looks like "huge" drawn out really long for emphasis--maybe with a cowboy drawl. (8
Nice Job, Phil, mixing the Macro and Micro but one question. Just where the heck did you find that picture and that Speedway gas station with prices that &%$@! low?! LOL:) You know what the *&&%$@!#$ I would do to pay $2.86 for gas?! This is a personal finance site so I can't tell you lest I incriminate myself. LOL:) Where I live, regular, yes I said regular unleaded is just under 4 Samolians! And that's on a good day. What's sad is nobody is going to stop consuming, especially not Gas. We never think about it but we're building towers in Dubai with what we're doing. After all, even when economies are down someone is always making money can you say GULF STATES, and I ain't talkin' Alabama and Wezzyana either.
There are whole business strategies in the United States and in the global economy that are based on cheap energy. By removing that as a constant element we are bound to see some significantly destabilizing effects on economic structure in relation to the status quo.
One case would be big box stores, which require very long supply lines, just-in-time supply lines fed by diesel trucks, and personal commuting to the big box stores to enable the mass consumption that sustains that particular business model.
Another case would be the way we presently do agriculture, which requires large fossil fuel inputs like fertilizers, pesticides, processing, packaging, and in many instances, long distance transportation of the final products. Like you said, we're already seeing pressure on any markets that are vaguely connected to petroleum. Biofuels are implicated in price increases in food and if plug in hybrids take off... there could be significant impact on the price of electricity if it's not done right.
There are many personal decisions one can make to reduce one's carbon footprint/exposure to rising energy prices: live closer to the city in denser housing - less energy per unit is used for heating and cooling and it is easier to access local goods and services and employment opportunities without a car.
There needs to be more action from the Federal government to make energy smart decisions like these more feasible for larger parts of the population. More funds for mass transit construction would be good, and incentives for investing in central cities and inner ring suburbs would be great too.
Philip, this is a great post in that it gets people thinking long-term. By providing some actual questions people might want to consider, you help convey the reality of the situation.
My question is this though: If it's a wise decision to buy a smaller, more fuel-efficient car, then how much of that gas savings is offset at the price of paying off a new (or used) car? For example, I drive an '02 Civic that's been paid off for over a year now. I'm fortunate that it gets good gas mileage, but even if it didn't, I wouldn't necessarily want to take on new car payments just because I wouldn't have to fill up the tank as much. Does that make sense?
Same goes with trying to move closer to work. Maybe the commute would be shorter, and travel options other than driving are viable, but would it be worth it if your mortgage or rent payments went up?
I guess what I'm trying to get at is the long-term cost trade-off. Less gas, new car payment. Less gas with shorter travel time, but more expensive mortgage payments.
I forgot to mention that we got married at City Hall! And it was a wonderful day.
Heh, what does Hayoooooge mean?
Yes, we only need 3 knives, but a steel or stone is needed to keep them sharp!
Instead of a double boiler, use two pots: put the chocolate, or whatever, into the smaller pot and put the smaller pot into a larger pot filled with boiling water.
Iron pots an pans last forever, though heavy.
Super post.
I'm with you -- I don't see a Mad Max apocalypse looming, but I do think people will need to adjust their lifestyles to factor in energy costs.
It's understandable that a lot of consumers made capital purchases based on cheap energy. A large house far outside a city is a good value in a dollars/sqft sense when commuting costs are insignificant. And a large SUV is cheap in a dollar/(lb of vehicle) sense, too, when fuel is the least expensive part of owning a car. People just have to get used to the idea that energy costs something and needs to be factored in.
There was a time when a middle class person could buy a home in New York City. That time is long gone; people expect that if you live in NYC you will rent unless you are very wealthy. Southern California is heading this way. People accepted that a small apartment was part of the proposition of living in NYC, and life went on. Extra space in cars and homes will become an increasingly expensive luxury, and consumers will need to adapt.