The LA Times claim that the commuting times in There are some people who claim that higher fuel prices are actually a positive. And in a way they have a point. You see, higher fuel prices will force American consumers to buy smaller, more fuel-efficient cars and, even in some occasions, settle for public transportation. In addition to that, this results to lesser greenhouse gas emissions. So a hike in fuel prices does have positive externalities.
I believe that, often times, Americans buy more than they need. Bachelors want big SUVs, so that they can show it off to wanting-to-be-fooled girls. The idea creates an enormous disparity with what
To be fair, I think the effects/externalities of higher gas prices; largely depend on points of view. Some employees have to travel far off to reach their office, that’s definitely a minus in productivity (Referring to those who opt for public transportation). And, more importantly, a rise in fuel prices will aggravate a rise in other products like food, clothes, etc. There is a logic to this thing.
If there’s one thing I learned in economics, it’s that everything is connected. I think this deserves special mention with regard to fuel. Some services cannot compromise vehicular size, like delivery trucks and other stuff. This means that their rates are going to get higher. And if the supplier rates go higher, stock holders have to possess more money. How do they get more money? They ask for a raise, so on and so fourth. It becomes a cycle of rinse and repeat. Now, that’s bad for the economy. We all have to suffer for increasing oil prices, while the oil stakeholders become well off.
What did we do wrong? We drove conservative cars while millionaires rolled around in SUVs. They sapped the oil, why do we have to be dragged with the consequences? I maybe wrong, but
But what do you guys think?
Dave Collins
Sources: About.com
