Gas Prices Will Continue to Rise, Says Cunningham
Gas prices surpassed the $4-per-gallon mark on Memorial Day weekend.
How much higher will they increase during the summer vacation season?
Robert Cunningham, assistant professor of economics at Alma College,
offers his thoughts on gas prices and economic policy as well as the
NFL’s labor agreement.
What is your assessment of gas prices for the rest of the summer?
Cunningham: “Gas prices will only increase more as the summer vacation and driving season begins. The impact will be felt most in the choices consumers make that go along with summer vacations. I think you'll see a switch from costlier hotels/motels to discount hotels, there will be more camping, consumers will spend less money at restaurants and less on tourist-type items, and you should see roadside rest areas busier as people stop to eat meals they've prepared in advance vs. stopping at fast food restaurants. Roads may in fact get even more congested, ironically enough, because truckers are driving a lot slower now, since slower speeds improve fuel efficiency.
is only a guess, but I would not be surprised if the national average
price of a gallon of gas is $4.50 by July 4. This would mean gas at $5
or more in some metro areas. The only thing that can be done to really
lower the price of gas is for people to drive a lot less and switch to
more fuel-efficient vehicles.”
What is your assessment of the stances taken by the presidential candidates on specific economic issues?
Cunningham: “John McCain's and Hillary Clinton's plan for a repeal of the gas tax is a terrible idea. A useful analogy is that of an addict. The U.S. is addicted to gasoline. Making it cheaper (if only marginally) is like offering cheaper cigarettes to someone who is trying to quit smoking.”
What is your assessment of the NFL's recent decision to opt out of its labor agreement? Do you foresee a work stoppage or lockout?
Cunningham: “On one level, this decision is purely a PR move, as the owners had until November to make this decision, and they chose to do it now to avoid distracting from play during the regular season. On another level, it may suggest some discontent by the owners in regards to the current labor agreement. If this is true, negotiations may be tense. However, given the NFL's $6 billion and rising revenues, it seems like there will be enough extra revenue by 2011 to make both sides happy, so I don't expect a work stoppage or a lockout. Worst-case scenario is a shorter preseason in 2011.“
Posted: Mon, June 2nd, 2008 at 9:16AM