Obviously the economic crisis is hurting a lot of people. Just last week the government announced that nearly 1.2 million Americans have lost their jobs this year alone. Although drivers see falling gas prices as a welcome turn of events, I for one am hoping that gas doesn't get any cheaper (or even goes up again--at least a bit).
Why? Cheap gas will prolong our dependence on foreign sources of oil. As long as gas is cheap, venture capitalists will be reluctant to fund companies developing alternative fuel sources and people will be more tempted to buy SUVs again (you’ve noticed the increasing number of small cars and hybrids on the road, haven’t you?). Not to mention, we will continue to send billions to some of the worst regimes in the world (in effect, funding terrorism). As James Woolsey, the former C.I.A. director, points out, "We are funding the rope for the hanging of ourselves." Pulitzer Prize-winning journalist Thomas Friedman explains further in his new book, Hot, Flat and Crowded:
$4-a-gallon gasoline is really starting to affect driving behavior and buying behavior – in way that $3-a-gallon gas did not. The first time we got such a strong price signal, after the 1973 oil shock, we responded as a country by demanding and producing more fuel-efficient cars. But as soon as oil prices started falling in the late 1980s and early 1990s, we let Detroit get us re-addicted to gas guzzlers, and the price steadily crept back up to where it is today. We must not make that mistake again.
For this reason, Friedman and others are advocating an increase in the gasoline tax or setting a minimum price of $3-$4 for gas (which is still half the going rate in Europe today).
Would you be willing to pay more for gas?
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