Friday, April 6, 2012

Payoff of fuel efficient cars depends on how you jigger the numbers

By Marc Jampole

Hybrids and other fuel efficient cars tend to cost more than comparable cars without the hybrid battery or other fuel-efficient technology. The natural question from the economic point of view is how long until the breakeven point? How many gallons of gasoline do I have to pump into the hybrid until the cost savings of getting more miles per gallon equals the increased cost to purchase the car?

Nick Bunkley proposed and answered the question for 18 fuel efficient cars in an article titled “Payoff for Efficient Cars Takes Years,” which started on the front page of yesterday’s New York Times business section and continued for almost a full page inside, including chart and photos.

From the Ford Fiesta SFE, which you must run for almost 27 years to break even with the traditional Fiesta to the Jetta TDI, which breaks even in 1.1 years over the traditional Jetta, it takes a while for the money savings to kick in from driving any fuel efficient car, no matter what the technology.

The problem is, Bunkley, like virtually every other economics writer, forgets about a lot of the costs. They only look at the costs that the owner of the car pays directly, and not at the indirect costs that all of society—including the owner—pay, or in this case don’t pay.

These social costs include:
  • The cost of increased respiratory and related illnesses because of the additional pollution.
  • The cost in damaged property from the greater increase in extreme weather events that global warming will bring.
  • Any costs to remediate the environmental damage directly resulting from car emissions e.g., cleaning buildings and streets.
  • The cost of military expenditures to protect gas supplies. Years ago an economist for CNG Pipeline named Mendel Yoho told me that if we added the additional cost of our military expenditures over those of Europe and added that to the price of gasoline that we would be paying about what Europeans pay for their gas.

With the great advances in digital technology and computational software, we can pretty much accurately assess each gallon of gas its share of these social costs. Adding social costs to the current price of gasoline would yield a “real” price of gasoline, which would be much higher, meaning that the payoff of switching to the more fuel efficient car would come more quickly.

We shouldn’t heap too much blame on Mr. Bunkley, who is merely taking a conventional approach.

In general, free-market economists and their popularizers frown upon the concept of social costs. They don’t like the idea of taxing companies and individuals for the social cost of a product or service, for several reasons. On the simplest level, any tax represents constraint on the market. The implication of a tax to assess social costs is that the government is intervening in the economy and society, either by using the money to address the social cost or by redistributing the tax to the population through lower other taxes.

This particular line of reasoning falls within the consistent position of Republicans for decades: no taxes and no redistribution of wealth (which in this case would be from polluters to everyone).

Did Bunkley think about including something about social costs saved by driving fuel-efficient cars and reject the idea? Probably not, because from health care to pollution controls to raising tuition to public universities, economics writings never focus on the cost to society, only to individuals.

And let‘s face it, an article with a list of 36 cars for sale is really about buying stuff. Bunkley is analyzing one of the criteria of purchase. I can imagine the car salesman saying, “The Civic Hybrid may have a cool color and great pick-up, but it’ll take you 12.1 years to break even, while it only takes you 4.4 years if you buy a Lexus HS 250h!”

At the end of the day, whatever one you buy, you’re buying a car, which is about the best thing anyone can do to support our suburbs-and-car-centered consumer society. Never mind that you will pollute the atmosphere to some degree, unless you’re running on solar or wind.

I’d like to see someone do an analysis, with and without social costs, of the breakeven point of building and riding mass transit.

Tuesday, April 3, 2012

A round of wedgies for Supreme Court, pro-gun extremists, Paul Ryan, Rick Santorum and others

Reading the news online this morning made me so angry that I wanted to hurt someone. Actually I wanted to hurt a bunch of people.

But since I’m a left-listing pacifist, I don’t really want to injure anyone or make them experience extreme pain. Maybe just make them feel a little discomfort and a whole lot of shame for what they’ve done.

In other words, I want to give them an OpEdgie Wedgie.

For my readers who may not be familiar with American youth culture or are not native speakers of the American version of English: Merriam-Webster’s defines wedgie as “the condition of having one's clothing wedged between the buttocks usually from having one’s pants or underpants yanked up from behind as a prank.”

Perusing the news about the latest mass murder on a college campus—the killing of 7 at tiny Oikos University in Oakland, California, makes me want to give an OpEdgie Wedgie to anyone who has ever voted for or advocated allowing people other than law enforcement officers to carry guns or bullets on college campuses.

And I’d like to give an OpEdgie Wedgie to Supreme Court Justices Roberts, Scalia, Thomas, Alito and Kennedy for voting that officials may strip-search people arrested for any offense, however minor, before admitting them to jails even if the officials have no reason to suspect the presence of contraband. My wild-running imagination wants these particular operations to leave an imprint of a swastika or hammer & sickle.

And let’s give an OpEdgie Wedgie to whoever in Obama’s Drug Enforcement Administration was involved in the decision to raid Oaksterdam University, a private school that trains people how to grow, package, retail, cook with and sell medical marijuana. Oaksterdam U. is located in California, where use of medical marijuana is legal. The raid represents the sheer stupidity of our drug laws as they apply to a relatively harmless substance that many people use to alleviate pain, subdue anxiety, counteract the nausea of chemotherapy or fight the effects of glaucoma and multiple sclerosis.

Republican presidential candidate Rick Santorum deserves an OpEdgie Wedgie every day, just for being Rick Santorum. He really deserves three or four OpEdgie Wedgies a day, one for his constant use of racial code phrases, one for implying that African-Americans are the primary recipients of government assistance to the poor, one for wanting to inflict his moral values and religious beliefs on the rest of America and one for pretending to advocate for the working class while all along working for the ultra-wealthy.

Mitt Romney deserves a daily OpEdgie Wedgie for hypocrisy and a thirst for power that will make him say or do anything.

And while we’re at it, let’s give a daily dose of the OpEdgie Wedgie to Paul Ryan for saying his budget plan will end the federal deficit by closing tax loopholes, but never telling us which loopholes he will close. For details, see Paul Krugman’s article earlier this week titled "Pink Slime Economics."

Speaking of pink slime, let’s give a pink OpEdgie Wedgie to the manufacturers of this concoction of ground-up meat parts for claiming pink slime is all beef, forgetting to mention that the beef to which they refer includes connective tissue, cartilage and fat. They also forget that it’s not the beef we care about, but the fact that it’s been marinated in ammonia.

I have never gotten or given a wedgie, so until this moment, I never realized what a great release of pent-up aggression one can experience from pulling up someone else’s shorts, even if done only in the head. I feel much better. Relaxed, almost glowing.

All I have to do now is shut the news out and I think I’ll be okay.

Sunday, April 1, 2012

How is the money race going?

(Click to make the images bigger. Graphics by Kevin Kreneck.)

Selections from the April 15, 2012 issue

COVER/Irin Carmon
GOP fights female rights

Mandate or Medicare


RURAL ROUTES/Margot McMillen
Morality left out of corporate calculations

Dishonoring Trayvon Martin;
Concealed Carry death toll mounts;
Five states debate ‘Stand Your Ground’ laws;
Senate Repubs tease, then block move to end oil subsidies;
Senators who voted to protect oil tax breaks got $23M from Big Oil;
Exxon profits up, taxes down;
Obama orders strong carbon rules;
Five banks control 52% of US assets;
Four voter fraud cases disenfranchise 800,000 Texans;
Voter restrictions block electoral vote;
House Repubs accidentally endorse constitutionality of ACA;
US appeals labeling smackdown;
Public doesn't like GOP Medicare plan;
Obama gets world's vote ...

‘Game Change’ documents GOP ID crisis

Republicans head for heated convention

GOP rep says no poor folks in N.C.

Keystone pipeline meets stubborn Texan

BOOK REVIEW/Seth Sandronsky
Looking at a year of revolt in Wisconsin

HEALTH CARE/Joan Retsinas
Medicare on chopping block

Romney and Santorum ridicule college

Not going postal

Politics in these times

Energy costs shifted to society

Ten documentaries to look for

Young people retire in ‘Portlandia’

German rocks at beggars banquet

and more ...