Sunday, April 26, 2009

Is Jeff Jacoby Stupid?

Or better yet, just how stupid is Jeff Jacoby?

In his latest column, Jeff makes an economic argument.  He suggests that, since environmentalists are for high gas prices, they also should support the biggest gas-guzzling cars.  The reasoning goes that, since low mpg vehicles use more gas, they'll drive gas prices up faster, and reduce gas consumption.  Whereas high-mpg vehicles would have the opposite effect, reducing the petroleum consumed, and keeping gas demand stable (or even reducing it).  

While I am happy Jeff understands the concept of supply and demand, and I'm sure he feels like he's really put one over the leftists with his awesome point to prove they wrong; he, like certain Texan representatives, Jeff's awesome attempt to make a sweet political point just makes him look stupid.  Why?  Because while he stuck around in Econ 101 to learn that rule of supply and demand, he didn't stay long enough for the coverage of externalities.  Carbon consumption hurts everyone, in the form of increased presence of greenhouse emissions, throwing the planets carbon cycle out of whack, and contributing catastrophic weather.

So Jeff's point, that environmental activists should support the use of low-mpg vehicles, because they'll drive of the price of gasoline up, misses the point of why high gas prices would be desirable; which is to reduce overall petrol use.  If everyone switched their car from whatever they owned; to a hybrid, or any general 'low-mpg vehicle,' then gas consumption would fall.  Which is the point.  A high price of gas is just another way to reach the same end, a reduction of carbon emissions.

I can go even further into this, if we start considering the elasticity of gasoline demand.  Gas is, and will be for quite sometime, a necessary part of the U.S. (and global) economy.  This makes the  individual, and the economy as a whole, very insensitive to the price of gasoline - i.e. our demand is inelastic.  So why not gradually reduce demand over time, with the use of low-mpg vehicles, allowing this very essential, and soon to be scarce resource to be slowly reduced from demand, rather than drive a ton of Hummers and invite potential oil shocks?  

So this whole piece on how environmentalists are "silly" in lobbying for increased low-mpg vehicle use isn't, in any way, an intelligent addition to our policy debate.  It's sophistry, and a really lame example of that too.

No comments:

Post a Comment