What the economists keep missing.

[citruscommando]

If you listened to what Fed chair Ben Bernanke had to say today, or you've read a number of Tom Friedman's columns over the past few years, you hear a lot of points to the effect that the rising price of gasoline should somehow "convince" people to consume less of it. Plenty of good economists have said much the same thing. And, if you've read

Comments

[banzai2326]

I agree. Living and working in the DC area, the hub-and-spoke network of public transportation simply doesn't work for me. You can't take the Metro from one suburb to another without going all the way into the city and back out again. So it's drive or nothing. The only possible alternative is carpooling. But I only know of one co-worker who lives close enough to me for carpooling to make sense. Trouble is, she's the type who likes going into the office at 6am (when I'm still waking up).

The other "DUH" issue for me with respect to gasoline and economics is the fact that they don't include gasoline in the figures for inflation. This is ostensibly because gasoline prices are so volatile that it would screw with the inflation numbers. But here's the thing: As you have pointed out, for most people, a certain amount of gasoline consumption is simply not optional. It's as necessary as buying groceries. So there's this HUGE economic factor that is hitting the consumer hard, and it doesn't even get figured into the government's calculations. WTF??? Seems to me that a big part of this downturn could have been predicted (and possibly avoided) if the Fed would simply acknowledge that gasoline is part of the "basket of goods" that all consumers must buy.