The Tipping Point
As gas prices hover around $3 per gallon again, American motorists are dealing with high transportation costs, as well as rising prices generally - since virtually everything we need gets to us by motor transport or involves petroleum somewhere along the way.The question is, how close are we to the "tipping point" - the point at which large numbers of people (especially middle class people) can't afford to keep up with ever-escalating fuel prices? It's one thing to grumble about having to pay an extra $10-$15 more per tank; quite another when you literally can't afford to keep on doing so.
When that point is reached, there could be profound repercussions throughout our economic and social system. Much of the current American way of life may be at a crossroads.
Consider just two inter-related aspects of that life - far-flung suburbs and the SUV boom.
Americans love both -understandably. Suburban developments open home ownership to people priced out of close-in (to the city) housing - as well as perceived safety (relative to blighted cities), better schools for their children and so on. SUVs, meanwhile, have become the modern equivalent of what large station wagons were to families in the 1960s and '70s. They're large, versatile - and like a home in the 'burbs, viewed (rightly or wrongly) as being safe. The two have boomed together, especially during the past 10-15 years - largely because of relatively cheap gas, which made both a long commute and driving a large, fuel-hungry vehicle feasible for average middle class Americans.
But both may share a common - and sudden - demise.
As bad as it is to sit in gridlocked traffic for an hour or more each way to get from one's suburban home to one's place of work, the trip becomes increasingly untenable as gas prices slide past $3 - especially if the trip involves a 15 mpg SUV. The savings achieved by purchasing a home in the 'burbs begin to disappear as weekly fill-up costs surge upward to $50-$75 or more. Many suburban families take in just enough money to afford their lifestyle - with little left to save or shift to cover unanticipated expenses.
Eventually, something's got to give.
SUV sales are already slowing - in particular, sales of the biggest, least fuel-efficient models. Owning a Hummer is once again becoming mostly an indulgence of the rich - not middle class suburbanites who want to play at being Arnold.
In fact, recent sales data suggests the large SUV may be on the verge of a wholesale extinction. Those who can remember the early-mid '70s will recall just how suddenly Detroit's once-prolific sheetmetal dreadnoughts disappeared in the wake of the OPEC oil embargo and gas shortages. Those shortages and price spikes were qualitatively different, however. They were the result of supply manipulations - not diminishing supply.
This time, the shortages could be permanent. Many geologists believe the world supply of easily/economically recoverable oil has hit "peak" (or soon will) and that -- along with exponentially growing demand -- will mean a future of ever-higher fuel costs, price spikes and shortages.
At $5 per gallon, suburban life - and all that goes with it - could become unsupportable. Everything's intertwined - from at-the-pump prices to the cost of groceries to the cost of home heating oil. Synergies are at work - and the pincers are being felt by more and more Americans.
We won't know what the actual tipping point is until we reach it. But it's out there, someplace. And we're headed toward it at a frightening clip - "frightening," because we seem so oblivious to it and have done so little to prepare for what could be wrenching changes in our lives.
One bad hurricane, a major war in the Middle East. It won't take much. We are incredibly vulnerable.
And almost totally unprepared.
