Why $6 a Gallon is Good for America's Future

By Automotive Staff | April 30, 2008
As much as people grumble about gas prices, they have not changed their driving habits. The solution, claims Mike Jackson, CEO of the AutoNation, is for gas to reach $6 a gallon. only at that point would people truly migrate into different vehicles and fundamentally change their habits. What? Newsweek points to thefact that the amount of fuel used has not changed, whether looking at daily/weekly/monthly time periods. How do you ask, is that possible when gas mileage is arguably better now in general then before? Note that the desire to move to the suburbs to live the American dream has seen the number miles driven annually has risen to 27,000 miles from its 19,000 mile level from 1980. The number of cars on the road has increased to the point that overall fuel usage has risen 18% from a decade ago. Unlike the crunch back in the '70s when people moved from domestics to imports, no such exodus has occurred in our present. Thus it will take an increase in gas prices to bring change whether it be behavior or in technology. Unfortunately for consumers, the latter may take decades; even with maximum resources, it takes automakers three to five years to roll out one brand new model. Our take? Get ready for the economy to slow down for the next few years as Americans adjust their wallets to accommodate this new, higher fixed cost.