Recession and revulsion at BP are doing what many thought not possible: getting Americans to use less gasoline per person per day. From Political Calculations:
The chart to the right reveals what we found when we took the U.S. Energy Information Agency’s figures for the average number of thousands of barrels of Finished Petroleum Products Supplied to the U.S. per day, converted those figures to the equivalent number of U.S. gallons, then divided that result by the number of people within the United States, as measured by the U.S. Census’ Resident Population Estimate for each month from January 1982 through March 2010 (we found that data in two places – here it is for between April 1980 through November 2000, and for April 2000 through the present).
What we find is that since January 1982, the average daily oil consumption for individual Americans living in the United States has averaged 2.56 gallons per person. More remarkably, we see that Americans have dramatically reduced their consumption of oil and its derivative products since July 2007.
So dramatically, in fact, that Americans today are consuming roughly one-third of a gallon per person less than they did on average from January 1982 through November 2007, the last full month before the largest recession in the U.S. since World War II began. As of March 2010, Americans are consuming an average 2.28 gallons of oil per day.
That drop has occurred even as the resident population of the United States steadily increased throughout this period.
From UCLA: UCLA Anderson Forecast: U.S. recovery a long, slow climb; Calif. recovery weaker than nation’s (emphases mine):
“If the next year is going to bring exceptional growth,” [UCLA Anderson Forecast director Edward] Leamer writes, “consumers will need to express their optimism in the way that really counts — buying homes and cars. And that is not going to happen if businesses continue to express their pessimism in the way that really counts — by not hiring workers.”
The result is an economic Catch-22.
Leamer explains that significant reductions in the unemployment rate require real gross domestic product (GDP) growth in the 5.0 percent to 6.0 percent range. Normal GDP growth is 3.0 percent, enough to sustain unemployment levels, but not strong enough to put Americans back to work. As a consequence, consumers concerned about their employment status are reluctant to spend, and businesses concerned about growth are reluctant to hire.
The forecast for GDP growth this year is 3.4 percent, followed by 2.4 percent in 2011 and 2.8 percent in 2012, well below the 5.0 percent growth of previous recoveries and even a bit below the 3.0 percent long-term normal growth. With this weak economic growth comes a weak labor market, and unemployment slowly declines to 8.6 percent by 2012.
via Calculated Risk: UCLA’s Leamer: “A Homeless Recovery”.
This is actually not surprising unless one has never read Keynes. It’s the kind of catch-22 that happens in a severe recession/depression. The only ways to break out of it:
- Government increases spending – since most pols have (erroneously concluded) that last year’s too-small stimulus proves govt spending doesn’t work, our politicians have ruled this option out.
- Dramatic increase in exports and reduction in imports – but since most nations are trying to do this and it was a global recession and all countries cannot be net exporters at the same time (who would buy all those exports?), this won’t happen.
- We wait for the gradual elimination of excess capacity: we wait for workers to die or retire or emigrate and we wait for business machinery to deteriorate and then need to be replaced.
The coming decade is looking very grim without a change in policy.