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Politics : Formerly About Advanced Micro Devices
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To: neolib who wrote (228974)4/12/2005 7:07:11 PM
From: Road Walker  Read Replies (1) of 1572786
 
re: Supply/demand curves are too simplistic wrt to status quo. There needs to be some sort of hysteresis function about the familiar range to more correctly describe consumer behavior. Once price pushes the bulk of consumers past the hysteresis step, then demand changes. It is generally not the nice smooth curve they show in economics textbooks.

Yes, but...

There are a lot of folks that are earning less than $10 an hour and commute an hour to work. And they have kids they have to drive to baseball practice. What's happening to those folks?

They can't afford a new hybrid. So they cut down on driving as much as they can (5%?). And they cut their spending in other areas.

So these folks can continue to invest their discretionary dollars to add to XOM's $18.5 Billion cash hoard and the Saudi royal family, or we can figure a way to lower consumption and subsequent prices.

Right now, relative dollars spent on gas are inefficient; they literally go up in smoke. A driver of an SUV that get's 15 MPG takes the same amount of time to get from point A to point B as a driver of a car that gets 35 MPG, but with double the cost to our economy.

It will take tax credits and tax disincentives, and patriotic motivation. But there is too much at stake to leave it to the "free" market... the "free" market is as much a myth as the "free lunch".

John
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