Wanna Pay $7 a Gallon?

3 Comments – July 2, 2007

First of all, I am not making up this date above.  I know that it is not July 2 yet but that is the date on the article.  I believe the date is representative of the issue of the printed magazine (and we all know that these dates are wrong).

This article by Jerry Flint, a man that has been covering the automobile industry for decades, points out that the only way to aggressively solve the carbon dioxide problem with changes to autos is a dramatic and painful tax. He explains that in many cases the cure may actually be worse than the sickness.  This is similar to my personal feelings except that I  temper his statements by stating that if the science was rock solid, it would probably be worth the investment but if the science is not rock solid, the risk of catastrophe from the cure is almost surely 100% and therefore is probably not justified.

What will cure our addiction to gasoline and save the atmosphere? There’s only one thing that will work. But I can’t say I’m for it. No, this cure is worse than the disease. It won’t happen. So we are going to keep filling the air with carbon dioxide for a while.

The best way, the one and only sure way, to reduce fuel use is to get us into smaller, lighter cars. And the way to do that is with a very, very stiff gas tax.

Alas, a quarter a gallon won’t do it. Even $1 won’t do it. I estimate that it would take a fuel price of $7 or $8 a gallon to do the trick.

While I’m not going to argue that the global warming theory is wrong, I’m not ready to wreck the economy for it. Most of our driving is to work and back, and I don’t like the idea of taxing people to go to work.

A stiff gasoline tax might wipe out General Motors (NYSE: GMnews people ), Ford and Chrysler. The Japanese are just ahead of Detroit in fuel-efficient cars, and as the tax went up, more buyers would flock to them. Thousands of jobs, tens of thousands, gone. The country could be thrown into recession and maybe a stock market collapse.

We could see chaos in the oil producer states–Mexico, Iran, Nigeria, the Emirates, Russia, Norway, Venezuela, Texas, Oklahoma, Alaska and others. They’ve gotten used to $60-a-barrel oil. High taxes on gasoline would depress demand and sink the price to maybe $35 a barrel again. Cheap oil would starve certain terrorist-loving nations, which is good. But are we ready to bring on chaos in Texas and poverty in Nigeria?

You can read this excellent article here.

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