More on Gas Prices

To add on to the previous post, Forbes notes that despite the high gas prices, people are not adjusting their behavior(hat tip: Instapundit):

But what's more interesting about these stories is what they don't tell you. For example, the Associated Press reports that "surveys indicate drivers won't be easing off on their mileage, using even more gas than a year ago." Now why is that? If prices are rising, one would expect consumers would use less.

The answer might be in some of the long-term trends that the short-term media lens is too cramped to see. Energy prices may be rising, but energy itself is much less important to consumers and to the overall economy than it once was.

This graph is handy to note that the cost per BTU declined rather steadily from over $18 per BTU in 1973 to just over $10 per BTU in 2000.

And let us not forgot that when adjusted for inflation, the price of a gallon of gas reached its peak during the Carter Administration.

The ultimate question becomes this: what will be the tipping point that makes people change their use of gasoline? Let's just hope that we don't have to return to the bad old days.