Gas and human nature

All in all, Saipan’s gas price of $3.17 or so a gallon for regular is not substantially higher than it is in many places stateside. Still, it’s far more than folks are used to paying. And, worse yet, wholesale unleaded gasoline futures jumped over 8 percent yesterday, so international traders must be mighty jittery for some reason. In other words, there may be more gas pains on the way.

It’s not my style to wag a finger at you, but I would caution the Commonwealth’s households against jumping on the whiner bandwagon, claiming unique victim status from the world’s commodity markets.

Doing so will merely distract you from the important task at hand, which is to sharpen the family budget pencil and decide how much your additional fuel expenses are going to be offset by decreasing expenditures in other areas, and how much will simply wind up being reflected as increased total monthly expenditures (which ultimately means that it’s coming out of household savings, since it reduces the amount of savable cash).

I tried recasting that last paragraph, but I gave up, so you may have to read it twice. Sometimes economics prose is like passing a kidney stone, there’s no elegant way to squirt the bugger out.

Speaking of inelegant, I note that gas price spikes inspire the chattering classes to rattle their mouths even more than usual. Every gadfly, environmentalist wacko, Bozo bureaucrat, socialist nitwit, and backyard pontificator will be lecturing the family cat on how public (i.e. socialist) transportation will “solve” gas prices, how public (i.e. socialist) crusades to make alternative fuel out of old underpants will “fix” everything, or how public (i.e. socialist) persecution of oil suppliers or retailers will “serve” the common man.

So the Commonwealth’s usual suspects will make Bozos out of themselves (again) by offering “easy” solutions to problems that they don’t understand, have no expertise in, and can never understand (sound familiar?).

In fact, the Commonwealth has a flair for reacting emotionally to its predicaments, a trait that is partially responsible for the leper-like reputation we have with investors and managers. If you let the gas gadflies and fuel-Marxists goad you on, you’ll just increase the CNMI’s reputation as a spoiled and mouthy juvenile delinquent.

As for gasoline consumption, the bottom line on Saipan, or Rota, or Tinian, is that there is a baseline level of driving that most residents have to do for working and shopping, and this creates what economists call an “inelastic” demand for gas. If gas goes up 1 percent in price, we don’t pare back our consumption by 1 percent. If gas doubles in price, we don’t cut our consumption in half, since we still have to get around. That’s inelasticity, a subject that I will cover in more depth if provoked.

My demand for gasoline has always been highly inelastic. I’m not willing to drive less. I refuse to car pool. I’d rather kiss a fruit bat than trade my beloved Detroit iron for some limp-wristed, granola econo-box on wheels. And the louder the eco-wackos wail about their bogus global warming scam, the more I drive; the experience somehow becomes more enjoyable the more it irritates the Marxist do-gooders.

What do you spend more money on: gas or taxes? Hmm. I thought so. If you’re going to worry about financial things, wouldn’t it make sense to worry about them in order of magnitude? I don’t hear the Marxist-do-gooders offering to do you any good on this note, do you?

I thought not.

I’m not belittling the effect of high gas prices; after all, I warned you about them last year, remember?

Anyway, for households, it’s a budgeting exercise. All of the Commonwealth’s consumers have choices to make. Some will rationally address their choices. Others will ignore their responsibilities and salve their souls with victimhood cries as they seek phony messianic answers.

Which means that some people are smarter than others. Hey, gas prices zig and zag, but human nature never changes.

(Ed Stephens Jr. is an economist and columnist for the Saipan Tribune. E-mail him at Ed4Saipan@yahoo.com.)