Fuel Prices Grab Inordinate Attention

I caught a great interview on Marketplace with President Obama today. Ryssdal asked good questions and followed up on the answers.

One thing that stood out is that we're still carrying on about fuel prices. I know this is just something politicians must talk about, but why?

President Obama mentioned someone who has to commute 50 miles per day being severely affected by fuel prices. Let's do the arithmetic.

50 miles/trip * 2 trips/day * 20 days/ month = 2000 miles/month. That twice the typical 1000 miles per month. This person puts almost 100,000 miles on the car in four years, causing it to depreciate faster than average.

If they get 25 miles/gallon, that's 2000 miles/month / 25 miles/gallon = 80 gallons per month. So if fuel prices go from $4/gallon to $2/gallon, that's $160/mo savings. That's nothing compared to the maintenance, insurance, and depreciation on a car being driven 2,000 miles/mo.

Critics will say, "yeah, but what about the poor and near poor? What about people living so close to the edge that the $160 really affects their life?" Poverty is a problem. People spending over an hour each way in a car every day is another problem. Trying to find a way to keep to squeeze $160 out of fuel cost is an unreasonable approach to these real problems. People need to find ways to earn more money, reduce their commute, and use an inexpensive car for long commutes (to minimize depreciation).

I suspect the reason we focus on fuel, is we sit and watch the meter tick off gallons with nothing else to do. The same people who unnerved by this completely ignore that a reasonably late-model car losses >$160/mo in depreciation. They also may being paying interest on the car and hardly think about that.

A politician can't be expected to be the one to do it, but someone needs to show people worried about fuel costs that fuel costs aren't that big of a problem.