"The real question CNN should ask is: What can you do about $4 gas? There is only one answer. 'Drive Less'. You as a consumer have control over your own gas purchases and little over the market price. The choice to drive less may be uncomfortable, but all the whining, crying and shouting for the government to do something will only make the situation worse. Price controls, gas rationing, windfall profit taxes, gas tax holidays...are all bad policies that may make you (and politicians) happier in the short run but will make everyone miserable in the long run. Your solution to high gas prices is to adapt. Drive Less! If the market adjusts, all the better, you're saving even more money."I guess he has heard of a demand curve. This is certainly the short run response because it is about the only way reduce consumption in the short run. Of course, in the long run, a person can respond to a higher gas price by purchasing a car that gets better gas mileage, or perhaps even by changing the location of his or her economic activities. There are already reports in the news of an increased demand for better gas mileage vehicles.
Thursday, May 22, 2008
TIM HAAB writes about the high price of gas: