Monday, November 21, 2011
Peak Vehicle Miles Travelled Shows the True State of America's Economy
Related to this morning's post, I ran across the above chart of annual vehicle miles traveled (plotted monthly by 12-month average) the other day on the excellent Gregor.us peak oil blog. As you can see, from the mid-1980s (just after world oil prices collapsed after hitting their initial peak in the late-1970s due to greater fuel efficiency in the United States and the coming online of the last "supergiant" oil fields in Mexico, Alaska and the North Sea) until 2008 total annual vehicle miles driven in the United States climbed steadily upwards with no significant break. All told, they actually increased by an astonishing 66% during that period.
The spiking of gasoline prices above $4.00 a gallon in the summer of 2008 and the resulting market crash that fall led to the first significant drop in miles driven in over two decades. Since then, the number has struggled to recover and actually appears to be getting ready to dip again.
Forget the stock market, or the GDP numbers or the manipulated official unemployment statistics, this chart is a much more reliable indicator of the state of the real economy. Except for a small portion of the population who live carless in the big cities, personally owned vehicles are absolutely essential for most people to engage in economic activity. Moreover, most goods are transported to their point of sale via trucks.
Clearly, this chart shows that the government's response to the economic crisis--massive amounts of unsustainable federal deficit spending--merely arrested the crash of the real economy and is holding it in a state of suspended animation. How much longer that effort can keep propping things up is anyone's guess. Sooner or later the sharp drop in annual vehicle miles driven is going to resume, along with a resumption of the economic crash.
Bonus: There are a lot of great driving songs that celebrate the all-too-brief and dying era when Americans could just take to the road whenever they felt like it. But my favorite is this little 1989 gem from the criminally unappreciated indie-rock band, The Vulgar Boatmen.