For the first time since 1980, when long lines sprouted at gasoline stations, Americans are beginning to cut down on their driving.Obviously, I'm concerned about the "financial hardship" reported in the story -- but the bottom line is that Americans drive their large and energy inefficient cars too much.
The slight decline in total miles driven – apparent first in December – may indicate that the twin forces of high gasoline prices and a struggling economy are starting to affect the US lifestyle...
The last time that Americans did cut down on their driving in response to high prices, around 1980, they reduced their driving for 14 months. "We're starting to see a similar pattern emerge," Mr. Swanson [an economist with Wells Fargo Economics in Minneapolis] says. "This could be a huge washout this summer and for a couple of years."
Anyone who has traveled to Europe knows that high gasoline prices discourage unnecessary driving. In most European countries, gasoline prices have been several dollars per gallon higher than in the US for many, many years. These higher prices reflect taxes implemented to promote conservation and "green" policies. In some countries, the tax revenues are used to fund alternative energy.
Americans need to start thinking about gasoline the way that they think about cigarettes -- tax the costly behavior to discourage it and to pay for solutions.
Visit this blog's homepage.