What about oil prices?

April 27, 2006

First, the Good News: The recently (by which I mean: occurring over the last 2 years) rising gas prices have yet to show any significant impact on the auto-industry.

“So far, the perceived gas price increases have not had any discernable impact on new-vehicle buying patterns, at least with regard to the size of the engine,” said Tom Libby, senior director of industry analysis at the division of Westlake Village, Calif.-based market researcher J.D. Power

And now for the Bad News: It’s about to set in.

“[T]here have been some reports that consumers are shifting away from SUVs and into smaller vehicles…That would be bad news for Detroit automakers, which make a lot of their money on big, powerful vehicles.

According to a study released Wednesday, 62% of new-vehicle shoppers are at least strongly considering the purchase of a vehicle they normally would not have considered, and half of those, or 30%, say they already have changed their minds about what vehicle they are going to buy.”

And now for the politically-charged news, CNN reports:

WASHINGTON (CNN) — Every American taxpayer would get a $100 rebate check to offset the pain of higher pump prices for gasoline, under an amendment Senate Republicans hope to bring to a vote Thursday.

I’m just curious: Where is this money going to come from? For every person in the United States? Because, you know, that’s like 30 Billion dollars, or three times Exxon-Mobil’s Y2005 net profits. For every taxpayer, perhaps? I’m sure CNN is not intentionally misleading, and that the proposal will probably only affect “taxpayers,” but even this lends itself to problems, as Kip points out. He beat me to the punch by a couple of hours, so I’ll point you to his take on it, here.

Even though I’m fairly confident that the sum (whatever it may be) will not represent any diminution of government spending in other spheres, the money will probably just come off a Federal printing press somehwere, I suppose I’ll take mine and gladly spend it…

The bottom line: When politicians engage in “rent seeking,” it can really only be considered “vote buying.”


Posted in: Potpourri

Comments

Leave a Comment

If you would like to make a comment, please fill out the form below.

Name (required)

Email (required)

Website

Comments

Archives

Categories