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Commentary: Walking toward the New Good Old Days

This article first appeared in the St. Louis Beacon, Jan. 14, 2013 - People rarely look at the cost of energy inputs when thinking about the economy. This is a major intellectual failing, since your goods don't move from place to place in the incredibly complex global dance without energy inputs - especially GASOLINE, that energy-dense, portable, stable stuff that we seem to really love for the cars and trucks we all find so handy.

So while we argue about Wall Street and fiscal cliffs and trillion dollar coins and tax cuts for people who already have tax cuts, does anybody ever talk about how much gas costs? Not the spot price - but the real price, adjusted for inflation, compared with all the other stuff we need?

Timothy McMahon at InflationData.com cross-referenced gas prices from the Energy Information Agency and the Consumer Price Index from the Bureau of Labor Statistics. Our gas prices are at their highest real level since the nasty days of stagflation - and the GREAT DEPRESSION!

 

Did you know we were at inflation-adjusted highest that you haven’t seen since you were in a gas line in your bell bottoms? And check out when that red line dips down toward $2-$2.50 a gallon. That happens during the periods we call "The Good Old Days" - the go-go 1960s, the Roaring 1980s and Post-Cold War 1990s. Things get all screwy when you get past the Dot Com Bust, when a recession gripped us and we started pretending we were wealthy by lending each other money to get bigger bathrooms. Gas prices went up and things started to suck.

We still haven’t figured a way out. That's where we find ourselves at the current moment: with relatively pricey gas, arguing about whether we should cut taxes another 1 percent or not, praying that the magic economic genie is gonna save us. Maybe there's something else at play. So what to do for the future? The future of the world is too big, the future of America is too unwieldy. Let’s just start with what Saint Louis should do. Just one of my answers: the trolley.

If you cross-reference current gas prices with forecasts for available supply (how much gas we’ll refine every day) and likely demand (from the Brazilians, Indians and Chinese who are putting millions of cars on the road) - it is hard to imagine that we will ever return to the real gas prices of The Good Old Days. So if energy prices are only going to get higher - or even if they stay at the same level - what investments could be made to improve our future economic outlook?

It isn’t more suburbs, of that you can be reasonably certain; that was a one-time development spree enabled solely by cheap, stable oil prices, the likes of which you will never see again. The investment of the future will be in pedestrian-friendly city development, structures that will enable economies to flourish with or without the ownership and maintenance of an automobile.

We’ve got waves of population (Baby Boomers, specifically) who will be transitioning to years of more fixed income, and millions of young people squeezed between crippling college debt and rotten job prospects. The last thing either of these people really need is the monthly expense of a car. So, imagine, just to begin, a trolley that connects the length of Grand Avenue with the Fox, then reaching west to the Loop (named for the trolley, for Pete’s sake!) and east to Olive, Washington, and the Arch.

Imagine flipping a tough situation - rising gas prices - and turning it into a way to revitalize every parcel of land up and down these critical arteries. Real estate values will climb, buildings will be designed around mixed use of retail, office and residential, young people will move in, families will reside closer to the city center, the lion will lay down with the lamb, the tax base will flourish.

Crazy, idealistic future scenario? Are you kidding? I’m describing 1913. The lovely bones of St. Louis were made during the era of streetcars, only ending definitively during the final push for dominance by automobiles and interstate highways in the 1950s. Since St Louis’ initial investment on streetcars began just after the Civil War, cars and suburbs have been the freaky experiments - not trolleys.

It’s just a thought, an option we might pursue. The thing that likely won’t be optional is a world of cheap, stable gas prices saving us from economic malaise. If we want to get to the New Good Old Days, we might just have to walk.

Eric Garland is a writer who focuses on the trends that are changing life for everybody. He is the author of "How to Predict the Future…and What To Do About It So You WIN!!!" and “Future, Inc.: How Businesses Anticipate and Profit from What’s NEXT.”

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