September 27, 2022

The Market Works

Many of the same people who champion fuel-efficient, (relatively) environmentally-friendly automobiles are at the front lines calling for the government to "do something" about high gasoline prices.  For these people, the news that higher gas prices are driving an unmistakable shift to the very cars they’d like us to drive must present a bit of a puzzle.  Which agenda item to support?  What a conundrum.  But the truth is that their efforts were never needed.  Free markets take care of rising prices and increased demand for commodities quite nicely, thank you.

From the Times:

The switch to smaller, more fuel-efficient vehicles has been building in recent years, but has accelerated recently with the advent of $3.50-a-gallon gas. At the same time, sales of pickup trucks and large sport utility vehicles have dropped sharply.

In another first, fuel-sipping four-cylinder engines surpassed six-cylinder models in popularity in April.

Sales of Toyota’s subcompact Yaris increased 46 percent, and Honda’s tiny Fit had a record month. Ford’s compact Focus model jumped 32 percent in April from a year earlier. All those models are rated at more than 30 miles per gallon for highway driving.

How did this miracle, the changing of Americans’ auto-purchasing habits, which decades of environmentalism failed to shift a single iota, take place?  Dave Strom knows.

Dave Strom of South Boston, Va., recently bought a tiny Smart ForTwo Passion Coupe, made by Daimler, the German automaker.

Mr. Strom also owns a pickup truck, which he uses mainly to haul his boat. When he runs errands, he drives his Smart, which he says is getting 45 miles a gallon.

“I had to smile the other day when I filled my tank for $18 and the guy next to me had a Ford Explorer and the pump was clicking past $80,” said Mr. Strom, a 66-year-old retired manager of a Chevrolet dealership.

It’s simple.  Just get the heck out of the way, people, and the market takes care of itself.

In this case, many people recognize that the days of $1.50 gasoline are gone forever.  As our car payments on our SUVs and pickups wind down, I expect this trend to continue.  And that’s a good thing, despite protests over higher fuel costs. 

Denying reality is foolish and that’s exactly what Hillary and McCain are doing by supporting the suspension of the federal gas tax.  Prices are what they are for a reason; wishing and legislating won’t change that.  And the people who are buying small cars despite their preference for larger vehicles know that.

marc

Marc is a software developer, writer, and part-time political know-it-all who currently resides in Texas in the good ol' U.S.A.

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