Quote Originally Posted by shokhead
BS. Nobody changed cars and after the gas supply was back,everyone went back to the way they drove and went on trips just like before. You might have been a kid but i was in line for gas so i do remember. I never,ever heard any of my friends or our parents have any concern about getting a 6 instead of a V8 or looking at a smaller car,never ever. Nobody cared about price,only that there was gas. The press,paper and tv are good about making it a bigger deal then it is. It is what it is, like you said,we demand it and they supply it,for more profit.
Reality check time -- people DID alter their behavior during the two previous gas crises. All you gotta do is look at how the car buying market drastically shifted to smaller cars starting in the mid-70s. When the price of gas more than doubles in a matter of months (remember when gas went from $0.25/gallon to about $0.50/gallon), and you have gas rationing (remember the gas lines, and only being able to buy gas on alternate days depending on if your license plate ended in an odd or even number?), you better believe that people were scrambling to cut back on their fuel consumption.

The Arab oil embargo directly led to the rise of Japanese car sales in the U.S. Back then, midsized Japanese cars were not sold in the U.S. All that they marketed were their compact cars, and once the gas prices spiked, a lot of people in my neighborhood traded in their V-8 jalopies for Toyotas, Datsuns, and Hondas. My dad traded in his old V-8 Plymouth Fury for a VW Beetle. People initially bought those cars for their fuel economy, but soon found that they were pretty well designed and reliable, so they stuck with the Japanese nameplates even after gas prices went back down.

Don't believe that people were buying smaller cars? Just check a sales chart for cars in the early-80s and you'd see that the top selling cars were typically the Ford Escort, the Chevy Chevette, the Chrysler K-cars, and/or the Chevy Cavalier. All of these were four cylinder vehicles that got around 30 MPG and weighed less than 3,000 lbs. The overall vehicle fleet peaked in fuel mileage in 1986, and the overall fuel economy for the cars that we buy has gone down ever since. No coincidence that the mid-80s was when people began to once again expect that cheap gas was their birthright, rather than the fleeting commodity that it can be. When people are no longer confident in the stability of gas prices, then they adjust their habits at that point.

Like I said, it does not take much of a shock to the balance between supply and demand to create huge price fluctuations. OPEC tries to regulate the supply of oil so that it maintains a rough equilibrium, and systemic changes to the system are now making it more difficult to maintain that equilibrium. Increased global demand for fuel has made the entire system more precarious than before. Equally precarious is that we now import more of our oil than ever before, all the while increasing our consumption (driving less fuel efficient cars and building homes in the boonies that require two-hour work commutes). Don't think higher gas prices change how we buy cars? Just look at the price premiums and waiting lists for hybrids, compared to the incentives, rebates, and sharp sales decreases for the big SUVs.