Shifting US Attitude Toward Transportation – R. Baker

It looks like Americans are getting smarter about what is actually affordable. But this isn’t the last word. Lets look at the broader economic context that is likely to push public opinion even further in the same direction.

Soaring oil prices will translate into widespread inflation after the prices have a chance to filter down during the next year — into an increase for everything that moves by oil; whether by ship, plan, train, or truck, tractors on the farm or road building equipment. (it doesn’t matter whether anyone believes we’re at peak oil production or not; all that matters is that world demand seems to be sending oil prices higher for most of the last decade) If the fed cuts interest rates to try to revive an economy plagued by the end of the housing bubble and high consumer debt, then it means that foreigners will likely stop lending the US about $2 billion a day in unbacked loans, largely to buy oil and stuff from China. Why lend when the treasury notes you hold yield less than inflation?

If the fed raises the prime rate, then the economy sinks into recession. If they lower it, then the dollar sinks even faster than now. The sinking dollar is helping to raise the price of oil in the world market due to international competition for a limited supply. It looks like we may be caught in a “liquidity trap” where lowering interest rates fails to stimulate the economy because of the dollar’s falling value. This leads to the syndrome they used to call “stagflation” during the oil crisis of the 1970’s. In my opinion, a good explanation of how various factors and trade-offs interact is at this link:

— Roger, Austin


Three-fourths of Americans believe that being smarter about development and improving public transportation are better long-term solutions for reducing traffic congestion than building new roads, according to a survey sponsored by the National Association of Realtors(R) and Smart Growth America. The 2007 Growth and Transportation Survey details what Americans think about how development affects their immediate community. Nearly three-quarters of Americans are concerned about the role growth and development play in climate change, as well as remaining concerned about traffic congestion. Half of those surveyed think improving public transit would be the best way to reduce congestion, and 26 percent believe developing communities that reduce the need to drive would be the better alternative. Only one in five said building new roads was the answer….

Read more here.

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