Through $4 Gas, Consumers Find Religion: Record Decline in Drivng, Record Level of Conservation

The Federal Highway Administration reported that travel during April 2008 on all roads and streets in the nation fell by -1.8%, resulting in estimated travel for the month at 245.9 billion vehicle-miles. April marks the sixth consectutive month of traffic volume decline, compared to the same month in the previous year. Cumulative travel for 2008 fell by -2.1% compared to 2007.

On a moving 12-month total basis, traffic volume fell to a three-year low of 2.982 trillion miles, the lowest level since May of 2005 (see chart above), and it has fallen in each of the last six months. This six month trend (in both year-over-year traffic and the moving 12-month total) is the most significant adjustment in driving behavior in at least the last 25 years. There was never more than a single monthly decline in traffic volume until 2006, a few examples of two consectutive monthly declines 2006 and early 2007, but never in the history of these data was there ever a period of more than a 2-month consecutive decline until now, and therefore the 6 consecutive monthly decline is a record, and represents the most significant adjustment to driving behavior in recent history.

High gas prices are working - consumers are changing their behavior by driving less and conserving gasoline. In fact, high gas prices have probably done more to change behavior and inspire conservation of fossil fuels than all of the Earth Days, and all of the efforts of groups like the Sierra Club, combined? Consumers have "found the religion of environmentalism and conservation" through high gas prices.

Through $4 Gas, Consumers Find Religion: Record Decline in Driving, Record Level of Conservation

The Federal Highway Administration reported that travel during May 2008 on all roads and streets in the nation fell by -3.7% compared to the same month last year. May marks the seventh consectutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through May in 2008 fell by -2.4% compared to 2007.

There was never more than a single monthly decline in traffic volume until 2006, a few examples of two consectutive monthly declines 2006 and early 2007, but never in the history of these data was there ever a period of more than a 2-month consecutive decline until now, and therefore the 7 consecutive monthly decline in miles driven is a record, and represents the most significant adjustment to driving behavior in recent history.

On a moving 12-month total basis, traffic volume in May fell to a three-and-half year low of 2.966 trillion miles, the lowest level since January of 2005 (see chart above), and this measure has fallen in each of the last seven months. Further, the 16 billion mile decrease in May's moving 12-month total was the largest monthly decrease on record, going back to 1983, and marks the most significant moving 12-month decrease in miles driven in at least the last 25 years.

High gas prices are working - consumers are changing their behavior by driving less and conserving gasoline. In fact, high gas prices have probably done more to change behavior and inspire conservation of fossil fuels than all of the Earth Days, and all of the efforts of groups like the Sierra Club, combined? Consumers have "found the religion of environmentalism and conservation" through high gas prices.

Amen, brothers and sisters.

The Largest Record of Conservation in U.S. History?

The Federal Highway Administration reported that travel during June 2008 on all roads and streets in the nation fell by -4.7% compared to June last year. June marks the eighth consecutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through June in 2008 fell by -2.8% compared to 2007.

There was never more than a single monthly decline in traffic volume (vs. the same month a year ago) until 2006, a few examples of two consecutive monthly declines 2006 and early 2007, but never in the history of these data was there ever a period of more than a 2-month consecutive decline until recently, and therefore the 8 consecutive monthly decline (November 2007 through June 2008) in miles driven is a record, and represents the most significant adjustment to driving behavior in recent history.

On a moving 12-month total basis, traffic volume in May fell to a three-and-half year low of 2.954 trillion miles, the lowest level in almost four years, since October of 2004 (see chart above), and this measure has fallen in each of the last eight months. Further, the 13 billion mile decrease in June's moving 12-month total was the largest monthly decrease on record, going back to 1983, and marks the most significant moving 12-month decrease in miles driven in at least the last 25 years.

Q: Now that gas prices started falling in July and August, will consumers continue to reduce driving, or will they revert back to their old driving patterns? We'll know in about a month, when the July traffic volume report is released.

Traffic Volume Continues To Decrease in October; New Record Set for Annual Decline of 100B Miles

The Federal Highway Administration reported today (direct link here) that travel during October 2008 on all roads and streets fell by -3.5% compared to October last year. This drop follows the -4.2% September decline. Further, October marks the twelfth consecutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through October 2008 also fell by -3.5% compared to 2007.

The twelve consecutive monthly declines (November 2007 through October 2008) in miles driven compared to the same month in the previous year is close to a record, and represents one of the most significant adjustments to driving behavior in history.

On a moving 12-month total basis, traffic volume in October fell to 2,907 billion miles, the lowest level in almost five years - since February of 2004 (see chart above), and this measure of traffic volume has fallen in each of the last nine months.

Bottom Line: The moving 12-month total traffic volume in October 2008 (2,907 billion miles) is below the October 2007 level (3,007 billion miles) by 100 billion annual miles driven, the largest annual decline in FHA history (data go back to 1971). At an average fuel efficiency of 20 m.p.g., and an average gas price of $3.39 per gallon over that period (data here), that reduction in miles driven represents an annual savings of almost $17 billion for American consumers and businesses.

That's in addition to the much larger $350 billion expected annual savings for consumers and businesses from the drop in gas prices from $4.12 per gallon to $1.67 since July (gas price data here), since American consumers and businesses save about $1.42 billion annually for every penny decrease in gas prices (see calculation here).

Thanks to John Thacker for the FHA update.

Longest Record of Conservation in U.S. History?

The Federal Highway Administration reported that travel during July 2008 on all roads and streets in the nation fell by -3.6% compared to July last year. June marks the ninth consecutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through July in 2008 fell by -3.0% compared to 2007.

There was never more than a single monthly decline in traffic volume (vs. the same month a year ago) until 2006, a few examples of two consecutive monthly declines 2006 and early 2007, but never in the history of these data was there ever a period of more than a 2-month consecutive decline until recently, and therefore the 9 consecutive monthly decline (November 2007 through July 2008) in miles driven is a record, and represents the most significant adjustment to driving behavior in recent history.

On a moving 12-month total basis, traffic volume in July fell to a four-year low of 2.944 trillion miles, the lowest level since July of 2004 (see chart above), and this measure has fallen in each of the last nine months.

Fall in Gas Prices + Less Driving = $315B Savings

The Federal Highway Administration reported today that travel during September 2008 on all roads and streets fell by -4.2% compared to September last year. This drop follows the 5.6% August decline, which was the largest ever year-to-year decline recorded in a single month. Further, September marks the eleventh consecutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through September 2008 fell by -3.5% compared to 2007.

The eleven consecutive monthly declines (November 2007 through September 2008) in miles driven compared to the same month in the previous year is close to a record, and represents one of the most significant adjustments to driving behavior in recent history.

On a moving 12-month total basis, traffic volume in September fell to 2,917 billion miles, the lowest level in almost five years - since February of 2004 (see chart above), and this measure of traffic volume has fallen in each of the last 8 months.

Bottom Line: The moving 12-month total traffic volume in September 2008 (2,917.2 billion) is below the September 2007 level (3,006.4 billion) by 89.2 billion annual miles driven. At an average fuel efficiency of 20 m.p.g., and an average gas price of $3.42 per gallon over that period (data here), that reduction in miles driven represents an annual savings of more than $15 billion for American consumers and businesses.

That's in addition to the much larger $300 billion expected annual savings for consumers from the drop in gas prices from $4.12 per gallon to $2.00 since July (gas price data here), since American consumers and businesses save about $1.42 billion annually for every penny decrease in gas prices (see calculation here).

Thanks to John Thacker for the FHA update.

The Great Driving Reduction: Consumers Save Money Voluntarily, With No New Legislation

According to data released today from the Federal Highway Administration, travel on all roads and streets in the United States fell by -1.2% in March 2009 compared to March 2008. This marks the 17th consecutive month of traffic volume decline (starting in Nov. 2007) compared to the same month in the previous year. The moving 12-month total for traffic volume has fallen now for 16 consecutive months, going back to December 2007 (see chart above).

The 12-month moving total for March is the lowest traffic volume (2,914 billion miles) in any month since February 2004 (see red line on the chart above, click to enlarge).

WASHINGTON -- President Barack Obama is asking consumers to put their money -- up to $1,300 per new vehicle by 2016 -- behind his plan for higher efficiency standards for cars and trucks and tougher rules on their greenhouse gas emissions.

In return, Obama said Tuesday in unveiling the plan, drivers would make up the higher cost of more fuel-efficient, cleaner vehicles by buying less gas at the pump. It would take just three years to pay off the investment and would, over the life of a vehicle, save about $2,800 through better gas mileage, the president said.

MP: It seems like consumers have already decided on their own that voluntarily buying less gas at the pump can be in their own self-interest, and are now driving the same number of miles as they were five years ago, even with more cars and more drivers. Without stricter CAFE standards, consumers on their own have been driving less, have been buying less gas at the pump, and in the process have reduced greenhouse gas emissions.

Traffic Volume Continues To Drop in November; New Record: An Annual Decline of -112B Miles

The Federal Highway Administration reported today (direct link here) that travel during November 2008 on all U.S. roads and streets fell by -5.3% compared to November 2007. This drop marks the thirteenth consecutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through November 2008 also fell by -3.7% compared to 2007.

The thirteen consecutive monthly declines (November 2007 through November 2008) in miles driven compared to the same month in the previous year represents one of the most significant adjustments to driving behavior in American history.

On a moving 12-month total basis, traffic volume in November fell to 2,894 billion miles, the lowest level in almost five years - since January of 2004 (see chart above), and this measure of traffic volume fell in every month of 2008.

Bottom Line: The moving 12-month total traffic volume in November 2008 (2,894 billion miles) is below the November 2007 level (3,006 billion miles) by 112 billion annual miles driven, the largest annual decline in FHA history (data go back to 1971). At an average fuel efficiency of 20 m.p.g., and an average gas price of $3.39 per gallon over that period (data here), that reduction in miles driven represents an annual savings of almost $19 billion for American consumers and businesses.

That's in addition to the much larger $325 billion estimated annual savings for consumers and businesses from the drop in gas prices from $4.12 per gallon to $1.82 since July (gas price data here), since American consumers and businesses save about $1.42 billion annually for every penny decrease in gas prices (see calculation here).

Traffic Volume Declines in August by Record 5.6%; What Will Happen In September, October?

Updated: The Federal Highway Administration reported yesterday that travel during August 2008 on all roads and streets in the U.S. fell by -5.6% compared to August last year. According to Secretary of Transportation Mary Peters, this was the largest ever year-to-year decline recorded in a single month.

August marks the tenth consecutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through August 2008 fell by -3.3% compared to 2007.

The ten consecutive monthly declines (November 2007 through August 2008) in miles driven compared to the same month in the previous year is almost a record, and represents one of the most significant adjustments to driving behavior in recent history.

On a moving 12-month total basis, traffic volume in August fell to 4.5-year low of 2.929 trillion miles, the lowest level since March of 2004 (see chart above), and this measure has fallen in ten of the last 12 months.

Bottom Line: The moving 12-month total traffic volume in August 2008 (2.929 trillion) is below the August 2007 level (3.008 trillion) by 78.911 billion annual miles driven. At an average fuel efficiency of 20 m.p.g., and an average gas price of $3 per gallon over the last year, that reduction in miles driven represents almost a $12 billion annual savings for American consumers. That's in addition to the much larger $200 billion annual savings for consumers from the drop in gas prices from $4.12 per gallon to $2.71 since August (gas data), since consumers save about $1.42 billion annually for every penny decrease in gas prices.

It will be interesting to see how the significant fall in gas prices in September and October 2008 affects driving behavior, and we'll know in about a month from the next FHA report on September 2008 traffic volume.

Thanks to John Thacker for the FHA update.

The Power of $4 Gas: It's A World Transformed

At $3 a gallon, Americans just grin and bear it, suck it up, and, while complaining profusely, keep driving like crazy. At $4, it is a world transformed. Americans become rational creatures. Mass transit ridership is at a 50-year high. Driving is down 4%. (Any U.S. decline is something close to a miracle.) Hybrids and compacts are flying off the lots. SUV sales are in free fall.

The wholesale flight from gas guzzlers is stunning in its swiftness, but utterly predictable. Everything has a price point. Remember that "love affair" with SUVs? Love, it seems, has its price too.

America's sudden change in car-buying habits makes suitable mockery of that absurd debate Congress put on last December on fuel efficiency standards. At stake was precisely what miles-per-gallon average would every car company's fleet have to meet by precisely what date.

It was one out-of-a-hat number (35 mpg) compounded by another (by 2020). It involved, as always, dozens of regulations, loopholes and throws at a dartboard. And we already knew from past history what the fleet average number does. When oil is cheap and everybody wants a gas guzzler, fuel efficiency standards force manufacturers to make cars that nobody wants to buy. When gas prices go through the roof, this agent of inefficiency becomes an utter redundancy.

At $4 a gallon, the fleet composition is changing spontaneously and overnight, not over the 13 years mandated by Congress. (Even Stalin had the modesty to restrict himself to five-year plans.) Just Tuesday, GM announced that it would shutter four SUV and truck plants, add a third shift to its compact and midsize sedan plants in Ohio and Michigan, and green light for 2010 the Chevy Volt, an electric hybrid.

Some things, like renal physiology, are difficult. Some things, like Arab-Israeli peace, are impossible. And some things are preternaturally simple. You want more fuel-efficient cars? Don't regulate. Don't mandate. Don't scold. Don't appeal to the better angels of our nature. Do one thing: Hike the cost of gas until you find the price point.

Charles Krauthammer

January Traffic Volume Drops By -1.7%, The Largest Percentage Decline Since At Least 1992

According to the most recent report on traffic volume trends from the Federal Highway Administration (Dept. of Transportation), "Travel on all roads and streets changed by -1.7% for January 2008 compared with January 2007. Travel for the month is estimated to be 226.7 billion vehicle miles."

The January 2007 to January 2008 decline of -1.7% in miles driven was the largest percentage drop in January traffic volume in at least 16 years (see chart above, data available here and here, back to 1992). One explanation could be that consumers are responding to higher gas prices by driving less. The biggest declines in January traffic volume were in the West (-2.9%) and the South Atlantic (-3.1%), see map below.

Thanks to Bobble for data source in a comment on a CD post.

The Great Driving Reduction Continues

According to data recently released from the Federal Highway Administration, travel on all roads and streets in the U.S. fell by -3.1% in January 2009 compared to January 2008. This marks the 15th consecutive month of traffic volume decline (starting in Nov. 2007) compared to the same month in the previous year. The 12-month moving total for traffic volume has fallen for 14 consecutive months, going back to December 2007 (see chart above).

The 12-month moving total for January is the lowest traffic volume (2,916 billion miles) in any month since February 2004. Further, the 110 billion mile reduction in the 12-month moving total since January 2008 (3,026 billion), represents about a $16 billion reduction in fuel costs for American drivers, at an average fuel efficiency of 23 m.p.g., and an average fuel cost of $3 in 2008.

Thanks to John Thacker, who comments that "As the great driving reduction proceeds in its second year, it shows no particular signs of slowing. The 12-month moving total of Vehicle Miles Traveled is now below that of March 2004, with a larger population and number of vehicles."

Shale Gas Boom Helps to Slash CO2 Emissions, As Well as Create Jobs and Save Consumers Billions

The chart above shows the significant reduction in coal's share of total U.S. energy generation, especially over the last four years, based on the most recent EIA data through February 2012.  For the first time in recent history, coal's share of electricity generation fell to below 40% in November and December of last year, and it's fallen even further to around 37% in the first two months of this year.  That's a very significant decline of almost 10% from coal's 48% share of electricity as recently as 2008, and that decline has happened for just one reason. No, it wasn't government regulation or energy policy.  It was because of the shale revolution that has produced an abundant supply of natural gas at historically-low prices, providing electric utilities with a cheaper and cleaner substitute for coal.   

From the Financial Times:

"The shale gas boom in the U.S. has led to a big drop in carbon emissions, as power generators switch from coal to cheap gas.  According to the International Energy Agency, U.S. energy-related emissions of carbon dioxide, the main greenhouse gas, fell by 450m tons over the past five years – the largest drop among all countries surveyed.

Fatih Birol, IEA chief economist, attributed the fall to improvements in fuel efficiency in the transport sector and a “major shift” from coal to gas in the power sector. “This is a success story based on a combination of policy and technology – policy driving greater efficiency and technology making shale gas production viable,” Mr Birol told the Financial Times.

Gas is fast becoming the new fuel of choice for the US power sector: in the past 12 months, coal generation has slumped by 19 per cent while gas generation has increased by 38 per cent, according to U.S. Department of Energy figures. A gas-fired plant produces half the CO2 emissions of a coal-fired one."

MP: So let's sum up some of the many economic and environmental benefits of the shale gas revolution:

1.  Residential, commercial, industrial and electricity-generating customers of natural gas have saved $250 billion over the last three years because of abundant, low-cost gas.

2. Hundreds of thousands of jobs have been created in natural-gas related industries, both directly in the gas drilling activities, and indirectly in the industries supporting natural gas drilling like companies producing steel piping, drilling equipment, fracking sand, etc.   

3. Cheap, abundant natural gas has sparked a manufacturing renaissance in energy-intensive industries like chemicals, fertilizers, and steel.

4. In the process of creating thousands of jobs and saving natural gas customers billions of dollars, the shale revolution has also significantly reduced carbon emissions as electricity producers have switched from dirty coal to clean, cheap natural gas.

Sure seems like a win, win, win situation  - an energy stimulus program that didn't require any taxpayer support and wasn't even part of any intentional energy policy from Washington. As Scott Grannis pointed out on his blog, "We have only just begun to see the impact of this incredible development on the U.S. economy's ability to grow."  And at his talk tonight at the Heritage Foundation for the Prosperity Caucus, Tyler Cowen suggested that we have probably under-estimated the positive effects of the energy revolution on the U.S. economy.  The changing energy landscape will definitely continue to provide significant benefits to the U.S. economy for decades to come. Welcome to the Shale Revolution.

HT: R.J. Kuehl

The Great Driving Reduction Continues

According to data released today from the Federal Highway Administration, travel on all roads and streets in the United States fell by -0.9% in February 2009 compared to February 2008. This marks the 16th consecutive month of traffic volume decline (starting in Nov. 2007) compared to the same month in the previous year. The moving 12-month total for traffic volume has fallen for 15 consecutive months, going back to December 2007 (see chart above).

The 12-month moving total for January is the lowest traffic volume (2,917 billion miles) in any month since February 2004. Further, the 107 billion mile reduction in the 12-month moving total since February 2008 (3,024 billion), represents about a $14 billion reduction in fuel costs for American drivers, at an average fuel efficiency of 23 m.p.g., and an average fuel cost of $3 in 2008.

Thanks to John Thacker, who recently commented that "As the great driving reduction proceeds in its second year, it shows no particular signs of slowing. The 12-month moving total of vehicle miles traveled (2,917 billion) is now below that of March 2004 (2,918 billion), with a larger population and more vehicles."

Consumer Spending or Business Investment?

Tune in to CNBC's "Kudlow and Company" on Monday night (7 p.m. EST) for an economic smackdown between Robert Reich, former labor secretary under Clinton, and free-market Austrian economist Mark Skousen, on the question, "What drives the economy--consumer spending or business investment?" It should be an interesting debate between a demand-side Keynesian and a supply-side Austrian.

The graph above shows that retail sales is not a leading indicator of the economy, does not predict recessions (shaded areas) and is probably one of the most stable and boring economic variables. Notice in the graph above that retail sales almost never decline, even during recessions (shaded areas). Industrial production, on the other hand, is an excellent indicator of the business cycle. Notice the significant decline in industrial output in each of the last four recessions.

Conclusion: According to Skousen, "Productivity and investment are driving forces in the economy; consumer spending is the effect, not the cause, of prosperity. Say's law (supply creates demand) trumps Keynes's law (demand creates supply)!"

For more information check out Mark Skousen's book "The Structure of Production."

Higher Gas Prices = Historic Reduction in Driving = 3,392 Lives Saved So Far in 2008 vs. Last Year

WASHINGTON—Federal safety officials say auto fatalities dropped almost 10% in 2008 through October, a trend overlapping with a historic cutback in driving (see chart above) as well as advancements in safety measures such as technology that prevents rollovers.

If the trend holds up for the year's last two months, highway deaths could reach their lowest level in the 42 years since the National Highway Traffic Safety Administration began keeping records.

NHTSA said Thursday there were 31,110 auto fatalities the first 10 months of 2008. That's a 9.8% decline over the same period in 2007, when there were 34,502 fatalities.

According to Acting NHTSA Administrator David Kelly, "When you talk about reductions in traffic fatalities in one year you are usually talking about hundreds in a good year. The fact that deaths are down 3,000 so far this year is staggering."

HT: Ben Cunningham

The Global Explosion of the Middle Class and the Significant Decline in Global Inequality

In the midst of the current widespread gloom and doom in the west, it is important not to lose sight of the true structural themes shaping our era.

Linked to the current mood, commentators often depict an embattled and shrinking middle class, with sharply rising financial inequality. However, globally, this is simply not true. One of the most startlingly positive phenomena for many generations continues to unfold around the world. We are in the middle of an explosion of the world’s middle class - about 70m people a year globally are entering this wealth group.

The phenomenon may continue for the next 20 years, with this global middle accelerating to 90m a year by 2030. If this happens, an astonishing 2bn people will have joined the ranks of the middle class. This demonstrates that, contrary to widespread opinion, global inequality is declining significantly, not increasing.

It is important for everyone in the so-called developed world to be constantly aware that these powerful shifts in global wealth are good not only for the developing world, but for them too. If you take a look at a chart of recent US export growth, you may well think you are looking at the wrong data series. But you are not. US exports are indeed growing at close to 20 per cent and it is this that is stopping the housing and credit crunch from driving the US into a deep recession. Aspects of the same phenomenon can be seen in Japan, Germany and even the UK.

The new middle-class explosion is going to remain the market opportunity for us all, or certainly for those of us who are prepared to respond to the new realities.

FT.com article "Boom Time for the Global Bourgeoisie"

Byron Wien's Surprises of 2012

Byron Wien, vice chairman of Blackstone Advisory Partners, yesterday published his list of surprises for 2012 -- following a 25-year tradition he began while still chief U.S. investment strategist at Morgan Stanley.

Byron defines a "Surprise" as an event which the average investor would only assign a one out of three chance of taking place but which Byron believes is "probable," having a better than 50% likelihood of happening: 

The Surprises of 2012 (first four): 

1. The extraction of oil and gas from shale and rock begins to be a game changer. The price of oil drifts back to $85 a barrel and the United States becomes less dependent on Middle East supply. Deposits in Poland, Ukraine and elsewhere prove promising as well.  Increased production from Libya and Iraq and reduced demand resulting from the slowdown in world-wide economic activity contribute to the price decline. 

2. Earnings for American corporations continue to move higher driving the Standard & Poor's 500 above 1400. Raw material prices continue soft and business leaders successfully adjust to slower economic growth by using technology to reduce the labor and logistical component of goods and services sold; profit margins stay high. 

3. The U.S. economy gets its second wind. Real growth exceeds 3% and the unemployment rate drops below 8%. Recession fears and even "the new normal" view of prolonged slow growth are called into question.  Capital spending, exports and the consumer drive the economy, overcoming fiscal drag. The drop in the price of oil and the rise in the stock market improve both consumer confidence and spending patterns. 

4. The recovering economy and the declining unemployment rate help President Obama convince the voters that he didn't do such a bad job in his first term after all. He is viewed as a good speaker but a poor leader who is running against Mitt Romney, viewed as uninspired and whose positions on many issues are unclear. Democrats take back the House of Representatives but lose the Senate in an anti-incumbent wave.

HT: Tom Keyes

Due to Rent Control, S.F. Has 31,000 Vacant Housing Units As Frustrated Landlords Give Up

The Bay Citizen -- "In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago."

The reason? The city's pro-tenant, outdated rent control laws that make it difficult to raise rents or evict a tenant.  

"Increasingly, small-time landlords are just giving up, like one who has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades. 

“Vacancy rates are going up because owners have decided to take their units off the market,” said Ross Mirkarimi, a progressive member of the Board of Supervisors. He attributes that response to “peaking frustrations in dealing with the range of laws that protect tenants in San Francisco that make it difficult for small property owners to thrive.”

Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing."

MP: As we know from basic economic theory, rent control laws are doomed to fail with many predictable unintended consequences in the long run: fewer new rental units are built or made available, many apartments are removed from the market, a decline in the quality of housing, lower rental rates for long-term tenants but much higher rents for new tenants, inefficient use of housing space, etc.  In other words, rent control laws guarantee that there will be less affordable housing in the long run, not more.

Traffic Volume Increases in Dec. for Seventh Month

The Federal Highway Administration reported today that travel on all roads and streets in the U.S. for the month of December was estimated at 243.4 billion vehicle miles, which is 0.6% above the same month last year, and almost 2.6% higher than the traffic volume in December 2008.  What makes those December traffic increases especially noteworthy is that the price of gas in December last year averaged $2.99 per gallon, which was almost 15% above the December 2009 price of $2.61, and 77% above the December 2008 price of $1.69 (data here). Consumers and commercial drivers appear to be able to absorb the higher gas prices and still continue to increase driving as the economic recovery strengthens.  In fact, traffic volume in December 2010 set a new record for monthly vehicle-miles of travel in that month.

The December traffic increase from its year ago level was the seventh consecutive monthly increase starting in June 2010, and the eighth increase in the last nine months starting in March 2010.

On a moving 12-month total basis (to smooth out the monthly seasonal variations), the annual vehicle-distance traveled through December 2010 was 3,000 billion miles, the highest 12-month total since July 2008, almost two and-a-half years ago (see chart above).

Following a sharp decline in U.S. traffic volume (moving 12-month basis) that started in late 2007 and ended at a cyclical low in May 2009, traffic volume has been gradually increasing as both personal and commercial travel on U.S. roads and highways have rebounded (see graph above and truck tonnage post here).  The ongoing improvements in traffic volume since the summer of 2009, which is taking place despite rising gas prices, indicate that the economic recovery is real, sustainable and gaining momentum.