Gas Price

[ctenidae]

Seems like banks giving out bad loans does more damage to the economy than gas prices (LOL).

More truth to this than you think. Seems to be pretty decent evidence popping up that home ownership isn't such a great thing- it may slow the velocity of money, it makes the workforce much, much less mobile, and it can lead to exagerated swings in consumer behavior.

[Nick]

I'm 35 min from work (about 25 miles). it's great. I used to go to Boston which was 50 + miles, plus the crappy traffic, so normally at least an hour and more like an hour and a half. Life is so much better now.

[deadheadskier]

Gas is up to $4/gallon right now, you really think $5 would send us to recession? It seems this argument is always used, but each time gas goes up the $ to recession does too..I recall $3 was the recession point a few years back, as gas was going over $2.

Seems like banks giving out bad loans does more damage to the economy than gas prices (LOL).

you'll get no argument from me that bad loans is a much worse situation. But to suggest that $4 gas doesn't have a major impact on people's spending simply isn't true. I saw more restaurants close summer of 08 before the banking meltdown than at any point in the past 5 years. Those aren't meaningful GDP type jobs, but it's real. You take that up to $5, especially with the effect it will have on heating oil? People are going to go out to eat way less, buy much fewer large ticket items, hold onto cars longer, etc.

[St. Bear]

you'll get no argument from me that bad loans is a much worse situation. But to suggest that $4 gas doesn't have a major impact on people's spending simply isn't true. I saw more restaurants close summer of 08 before the banking meltdown than at any point in the past 5 years. Those aren't meaningful GDP type jobs, but it's real. You take that up to $5, especially with the effect it will have on heating oil? People are going to go out to eat way less, buy much fewer large ticket items, hold onto cars longer, etc.

I would argue that that's not necessarily a bad thing. Too many people got accustomed to getting a new car every 3 years and eating out on a weekly basis, when that should be a luxury for the (moderately) wealthy, not middle America.

[ctenidae]

Gas is up to $4/gallon right now, you really think $5 would send us to recession? It seems this argument is always used, but each time gas goes up the $ to recession does too..I recall $3 was the recession point a few years back, as gas was going over $2.

I should point that theat the US uses about 15 billion gallons of gasoline a year. So, a $1 change in price can some impact. More importantly, though, is the psychological impact. Of course, that wears off- we got used to $1 gas, we got used to $2 and $3, $4 can be handled, we'll deal with $5, etc. It's the changes that have the effect, though.

[campgottagopee]

Seems like banks giving out bad loans does more damage to the economy than gas prices (LOL).

Ding, ding, ding.....we have a winner!!!

Could you imagine where our country would be if the banks 'forced' us to be financially responsible...what a thought.

Remember the days when you needed 20% down on a house??
Remember when you needed cash down to buy a car???

Why??? Cause it was a bank requirement.

Now people owe 15g's on a car that's worth 8, and it's my fault...., no, the bank gave you the damn money...not me.

We're slowly getting back to that, or at least from what I see. It used to be banks would loan 150% LTV on an auto loan...that it crazy, just crazy!!! Now, depending on one's credit it could be as low as 80% or as high as 130%....IMO, it shouldn't be any higher than 100%. Never happen, would hurt (at first) if it did, but in the long run our economy would be better off because of it.

[tjf67]

Ding, ding, ding.....we have a winner!!!

Could you imagine where our country would be if the banks 'forced' us to be financially responsible...what a thought.

Remember the days when you needed 20% down on a house??
Remember when you needed cash down to buy a car???

Why??? Cause it was a bank requirement.

Now people owe 15g's on a car that's worth 8, and it's my fault...., no, the bank gave you the damn money...not me.

We're slowly getting back to that, or at least from what I see. It used to be banks would loan 150% LTV on an auto loan...that it crazy, just crazy!!! Now, depending on one's credit it could be as low as 80% or as high as 130%....IMO, it shouldn't be any higher than 100%. Never happen, would hurt (at first) if it did, but in the long run our economy would be better off because of it.

I have never even looked for a loan if it did not seem affordable. I think you would have to also include the real estate agents, mortage brokers, attorneys and car salesman as the culprits as well. Shouldn't they have a professional responsabilty to inform their ustomers? I say yea, but the buck stops at the stupid asses that signed on the dotted line.

[campgottagopee]

I have never even looked for a loan if it did not seem affordable. I think you would have to also include the real estate agents, mortage brokers, attorneys and car salesman as the culprits as well. Shouldn't they have a professional responsabilty to inform their ustomers? I say yea, but the buck stops at the stupid asses that signed on the dotted line.

100% agree...not pointing fingers at all.

My point being just imagine if "we" all did what you do, can't afford it, don't buy it.

[tjf67]

100% agree...not pointing fingers at all.

My point being just imagine if "we" all did what you do, can't afford it, don't buy it.

Like Donald Trump?

[riverc0il]

I think the vast majority of people make that decision based upon housing costs.

If that were true, there would be no poor and middle class communities in metro areas, especially those near public transportation. But excepting certain neighborhoods, there are plenty of poor and middle class neighborhoods in metro areas, say within the I-95 belt all the way up to the doorstep of Boston. People sit in traffic by choice of where they live, often times defaulting to where they grew up. You might not get as big of a house or maybe no yard or maybe you have to buy into a condo or whatever versus a newish colonial on a generically created "Tree Type" + "Geographic Feature" Road with suburban sized yard. But those are choices. And then there is always renting as well. There are options and choices and maybe folks exercise the choice to live close to work or use public transportation.

As far as rooting for high gas prices equating to rooting for a recession.... who knows, maybe domestic innovation caused by transportation cost influenced inflation could kick start the economy in new and exciting directions. I don't know. I think there are bigger issues at work in the recession than gas prices. And for the vast majority of folks, an extra buck in gas equates to not getting a coffee at DDs every morning. Inflation of consumer goods pricing due to increases in gasoline is not a great argument. Lots of consumer goods are cheaper now than they were a dozen years ago when gas was a buck a gallon. Some prices will go up, others will go down due to innovations and competition. Crazy world.