mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Friday, November 03, 2006

I bought a truck, but that doesn't mean I'm dumb...

Via opinionjournal comes a link to this blistering fortune article about how dumb and forgetfull Americans are to buy SUV's when gas prices may go up again.

Some of his points are silly. He accuses GM buyers of "sticking their heads in the sand" because sales of the Escalade and Tahoe are 2 and 3x what they were last year, and GM credits lower gas prices for part of this. True. But the Escalade and Tahoe are also new models for 2007. It's fairly common for a vehicle's sales to be fairly low in the last year before a redesign, and to go up the year that the all-new vehicle is introduced - people would rather wait a year than buy a new vehicle that will look outdated in a year.

The other thing is that Escalades and Tahoes aint' cheap. Chances are, if you are spending $60,000 on a rimmed-out 'sclade, the fact that you might have to spend an extra $100 or so a month for gas is probably not a budget-buster. And the the article also talks about how GM's sales of the Cobalt and Aveo are down - because lots of people plan on buying a $60,000 Escalade, but when they realize gas is a $1 more than it was 2 years ago, decide to look at a $12,000 rebadged Daewoo instead. The Cobalt has been around for a few years, so it's not a shock that sales are slowing, and microcars like the Aveo are rarely big sellers in the US - the only reason people buy them is because they are cheap.

The fact is that even with the $3 a gallon gas we had a couple months ago, gas is still fairly cheap. The fact that I can drive my truck 4 hours to my parent's house in NJ for $30 or so at current prices seems like a steal to me compared to taking the train or a bus - I can blast rap music on the MP3-capable head unit and sing along, and I don't have to sit next to a urine-soaked bum.

And let's face it, gas prices are unpredictable. If you figure that, over the several years you will likely keep a truck, they will go up and down, you can kind of figure it will balance out in the end. As long as you can afford to keep putting gas in it when prices are high, if you enjoy the safety and comfort of a truck, you might as well buy it.

And buying a large truck when gas prices are high isn't totally irrational. Just like housing prices often go up when interest rates drop, truck prices often drop when gas prices go up. Part of the rebate I got when I purchased my Ranger was instead of a $1000 in gas cards - a promo designed to balance out the high gas prices - and when trucks are slow sellers, you have negotiating room at the dealership.

The author manages to throw in a jab at those durn republicans- saying that blue-staters buy imports that are better on gas. Of course, blue staters also often live in urban areas, where there's less need for a 4wd pickup or SUV (and it's harder to park on the street in a city anyway). But it must be because red-staters are dumb that they buy trucks and SUV's, not because they use them for towing horse trailers or clearing brush, or because they tend to have more kids to haul around than blue-staters.

from the article:

The sociologists have a simpler time of it. As Americans flock back to their old buying habits, it is all too easy to lump excessive fuel consumption in with other bad habits involving overindulgence: over eating, over spending and excessive television watching.

Yup, that's Americans. Fat, dumb, and stupid. Do you get the feeling that the author hates SUV's and the people that buy them because he can't understand how different people can look at the same things and come to a different conclusion. If people - especially red-staters - don't see a looming oil crisis in the future, they must be dumb:

The supply of oil is not limitless but apparently the current generation of Americans is all too willing to exhaust it by buying bigger cars than they need and letting their children and grandchildren fend for themselves.

No, the supply of oil isn't limitless. It is pretty big, though. The thing is that when gas prices go up, there is more of an incentive to mine marginal oil fields, do more oil exploration, explore stuff like shale oil, ect. High price increases the incentive for suppliers to enter the market - it's econ 101 (which I bet the author has never taken). Short term high prices don't always mean high prices in the long run.

And besides, once we run out of oil, or close to it, people will have an incentive to use alternative fuels. Right now, gas is cheap, and even at 2x the price isn't high enough to get many families to buy a Prius.

If you need me, I'll be sticking my head in the sand.


Post a Comment

<< Home