This "Price" Thingie

Wow, this is unexpected:

The FHWA's "Traffic Volume Trends" report, produced monthly since 1942, shows
that estimated vehicle miles traveled (VMT) on all U.S. public roads for March
2008 fell 4.3 percent as compared with March 2007 travel. This is the first time
estimated March travel on public roads fell since 1979. At 11 billion miles less
in March 2008 than in the previous March, this is the sharpest yearly drop for
any month in FHWA history.

Someone really should research this phenomenon.  It is almost if gasoline prices, which we all know exist solely for the benefit of oil company profits and to support oil company CEO pay, have this heretofore unsuspected utility to modify demand for scarce resources. 

Not to be deterred by this spurious data point, the US Congress is moving ahead with this:

The current high price of gas has led to a lot of crazy proposals from
gas tax holidays to creating a tax deduction based upon energy
consumption. But Rep. Paul Kanjorski's (D-PA) may top them all in terms
of its stupidity. From the Times Leader, Kanjorski's plan would do the
following:

    "¢ H.R. 5800 would tax industries' windfall profits.

"¢ The bill would set up a Reasonable Profits Board to determine when
these companies' profits are in excess, and then tax them on those
windfall profits.

    "¢ As oil and gas companies' windfall profits increase, so would the tax rate for those companies.

"¢ Kanjorski said his legislation will encourage oil companies to lower
prices to prevent them from receiving higher tax rates.

  • dave smith

    Really, really dumb.

    A much better solution would be to double dedcutions for refinery building or money spent exploring and producing domestically.

  • Dan

    Well said, Dave.

  • John Dewey

    I'm awaiting a reply from the FHWA for confirmation. It appears the total miles traveled estimates for March, 2008, and March, 2007, are not adjusted for differences in number of weekend days and holidays (Good Friday). March, 2008, had only 19 non-holiday weekdays. March, 2007, had 22 non-holiday weekdays. We should expect highway miles traveled to be down in March, 2008, regardless of the change in gasoline prices.

  • ElamBend

    If this Congressman's aides had taken the time to do a little research, they would have found that the refiners are getting killed right now because they have NOT passed along on the increases in un-processed crude that they have born. If they had, gas would be up around a Quarter more than it is.

  • Wesley Mouch

    Anyone want to go over/under on how long before someone proposes Directive 10-289? I'll set the line: July 31st

  • Wesley Mouch

    Anyone want to go over/under on how long before someone proposes Directive 10-289? I'll set the line: July 31st

  • Sol

    Also, John, big areas of the country got much heavier snow in March 2008 than in March 2007, which should naturally reduce the number of highway miles driven.

  • Jay

    So a smoothed out 4 month average might be the number to track to avoid calendar and weather anomolies?
    "Though February 2008 showed a modest 1 billion mile increase over February 2007, cumulative VMT has fallen by 17.3 billion miles since November 2006."

  • PeterGunn

    Help me understand this bill...
    If ANY company, after many years of R & D, is fortunate to receive a large return on their investment in the form of increased sales, they're due to be taxed at an exponentially increasing rate?
    What kind of capitalism is that? Has the congressman ever heard the word STIFLE? I can't imagine the negative effect this would have on innovation, invention and growth.

  • John Dewey

    Jay,

    I don't understand what cumulative VMT represents. If FWHA is referring to a moving 12 month total, then 17.3 billion miles seems insignificant. That's only about a half percent of the annual total VMT of 3 trillion miles.

    If I've understood the FWHA papers correctly, annual Vehicle Miles of Travel for the U.S. is an aggregation of data compiled by each of the 50 states. State highway departments sample data from permanent automated vehicle counters and from temporary relocatable counters in deriving their state estimates.

    Does anyone believe that federal and state agencies can produce vehicle mile estimates which are accurate to one half of one percent? I certainly do not.

  • Scott Wiggins

    The dems should be running scared on this issue...Could it be that all the grandstanding is meant to deflect attention from their having blocked energy development in this country for the last 30 years?

  • Jay

    John I read it as a 4 month moving average, from November to February, but I could be wrong. I've only been introduced to this source recently.
    I would say the fact that EIA data shows cap. util. at only about 86% and inventories not drawing significantly as a sign that gasoline demand is falling on a year ago basis. Not sure how much is the pathetic sales of SUVs and how much is less driving though.

  • Flatland

    Who is John Galt?

  • linearthinker

    I can't imagine the negative effect this would have on innovation, invention and growth.

    Sure you can, Pete.