The Price of Gas and the Type of Cars People Buy - What is Enough?

On most work days, I eat out with one or two coworkers, and if none, I’d go by myself. It is a habit to enjoy the Mercury News at lunch period. One thing I have noticed in last couple weeks is that advertisement for hybrid vehicles have propped up. I guess they need to increase sales.

Another article I read elsewhere talks about people haven’t abandoned SUVs yet, especially with the drastic drop in gas price. For some, their vehicle conversion is where they switch from a Hummer or gas-mileage-equivalent to a smaller big-car that yields some 18 MPG. So much for the hope that gas price can help to bring about drastic change in human behavior.

The interesting thing is, and it would be most rational, that gas price which is a short-term variable has such great influence on vehicle purchase which is a long-term decision. It would also be rational if people can switch car without the cost of depreciation, but we know that is not true. Gas price changes everyday, we cannot change our cars everyday!

Could the biggest problems we have be such short-term thinking that the majority of people have? Could it be a problem for the fact that majority of the people are only capable of, or only willing to perceive short-term? And maybe they can only see **singly-connected phenomenon**?

This has validity as we are in the situation today because…

Banks and big business were so adament about growing at an ungodly rate that led them to buy into the subprime, CDAs, and what not. (short-term thinking) Thus, they lost sight of what could possibly be the consequence. (missing the long-term)

Middle class and common people bought into the subprime loans as they were so focused on getting that oversized, or dream house of theirs NOW. (short-term thinking) Thus, they lost sight of how they could possibly lose it just as quick, either due to affordability or overlooked future variables. (missing the long-term)

And let’s say some married guy is so focused on growing his career or business, and he spend all his time and energy on getting ahead. To the detriment of long-term, he forgets his health, neglects his wife and children, and who knows what else he gives up.

Maybe it is important to ask and think about, “What is enough for me in the long-term”? And then make your investment, spending, saving decisions with that in mind. Yes? I think so.

Now it is your responsibility to define what is enough in your dictionary.

** Singly-connected phenomenon — the effect of a cause that is only one step away. When I said someone is only capable of seeing singly-connected phenomenon, that person thinks, “I killed you so you are dead”, and he stops there without thinking how my death would effect people I know and my surroundings. Or, the person thinks, “I took your money so you are poorer”, and he stops there without thinking how me being poorer will affect other things. If anyone knows an official term for this, let me know.

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