Where’s the outrage?

Posted on March 16, 2007 by Gene

Absent a major Gulf Coast hurricane, unexpected international strife or a wave of refinery woes, average U.S. gasoline prices are not expected to rise to the $3-a-gallon psychological threshold this summer — a good sign as well for the broader economy, which is under pressure from a weakening housing market.[AP via SFGate]

Okay. But what about Spring? Right now, high test — sorry, showing my age — premium gas in my neighborhood in San Jose is as high as $3.55 per gallon. Regular is about $3.33.

But as always, the price of gas is pegged to the ability of everyday people to tolerate it. Consider that the peak price for gas in 1997, during the height of the Clinton administration when Republicans were berating him for not releasing the Strategic Petroleum Reserve (adjusted for inflation) was $1.90.

So, where are the calls from the Republicans for George Bush to do something about oil prices?

Myself, I don’t care. I think that gas should be more expensive so that we think a bit more about using our cars. The biggest problem is inferior public transport. Here in San Jose, the light rail system is a silly boondoggle that doesn’t go where people need to go. If I were to try to take light rail to work every day, I’d have to drive 3 miles to the closest station, where there is no parking. Then once I got to Mountain View, I’d have to walk another 2 miles across freeways and what not to get to my office. Not very commuter friendly.

My office is 10 miles away, via expressway, so it’s not a very scooter-friendly spot.

The thing is, people were going crazy about $2/gallon gas, and now that it’s approaching $4 per gallon, it seems to have passed a threshold where people stop caring. This is an example of the creeping prices that oil companies employ: raise prices until people start to get pissed off, then back off just a little bit… then a few months later, start creeping them higher again. When they complain, back off — but only a little bit, leaving prices higher than where they started.

And this strategy is working.