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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

New paradigm for both drivers and car companies

By Morgan Housel






JewishWorldReview.com | The recession that began in 2007 left lasting scars on the American economy. One seems to be that we are driving less -- a lot less.

Total miles driven in the U.S. peaked in 2007 at a touch above 3 trillion a year. The latest figures from January put us at 2.95 trillion miles per year. That may seem like a trivial decline until you put it into historic context. It is, without doubt, the longest Americans have gone without growing their time on the road in at least four decades.

The decline is even larger when adjusted for the size of the population. Annual driving per capita has declined nearly 8 percent since 2005, or double the decline experienced during the recession of the early 1980s.

What's going on? There are four standard explanations, some more convincing than others.

The most obvious is the economy. Nine out of 10 workers drive to work, according to the Census Bureau. As employment fell by 9 million between 2008 and 2010, the roadways cleared up. One study by Texas A&M's Transportation Institute showed that the amount of time the average commuter was stuck in traffic fell 13 percent from 2006 to 2010, with most of the decline taking place during the recession.


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But that can't account for all of the decline. Employment has increased by 6 million since 2010, yet we are driving 10 billion fewer miles a year now than we were then. One study focusing on young drivers found: "The trend toward reduced driving ... has occurred even among young people who are employed and/or are doing well financially." And miles driven per capita peaked in 2005, nearly three years before the recession started. There is more to the driving story than a weak economy.

Gas prices are the other obvious culprit. Sticker shock at the pump likely caused most of the dip in miles driven in the '80s, but today it isn't as clear-cut. Nationwide average gas prices are lower today than they were two years ago, yet miles driven continue to fall.

Adjusted for average wages, gas prices today are nearly identical to prices that prevailed in late 2005, when vehicle miles traveled per capita peaked. The Congressional Budget Office parsed the data more carefully and concluded: "Recent empirical research suggests that total driving, or vehicle miles traveled (VMT), is not currently very responsive to the price of gasoline. A 10 percent increase in gasoline prices is estimated to reduce VMT by as little as 0.2 percent to 0.3 percent in the short run and by 1.1 percent to 1.5 percent eventually."

Rather than cutting back on miles driven, we have adapted to higher gas prices mostly through better fuel economy, which spiked around 2005 after plateauing for two decades.

Another explanation is a shift in where Americans live. Following decades of booming outward population growth from cities into suburbs, the past decade saw the return of urban living. Reuters reports that in 2010, 80.7 percent of Americans lived in urban areas as opposed to rural areas, up from 79 percent in 2000. Rural living is more conducive to long drives, so the shift explains part of the decline in vehicle miles traveled.

One of the more convincing factors fueling the decline in driving is demographics. Driving rates among different age groups are important because of an underappreciated demographic shift going on in the U.S. As the birth rate fell following the baby boom of the 1950s and '60s, the population of Americans in their 30s and 40s began declining early last decade. Census data show there are actually 4 million fewer "highly mobile" Americans ages 34 to 43 today than there were in 2005, when miles driven per capita peaked. The population of Americans age 74 and up, who drive the least, grew by 2 million during that period.

All of these shifts create opportunities for Ford, General Motors and Toyota, which have revamped their fleets to adapt to the new American driver. A decade ago, the manufacturer who could deliver the most headroom and horsepower per dollar won. Going forward, the fruits will go to whomever can deliver the most gas mileage and dependability per dollar. It is a new paradigm, for both drivers and car companies.

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Morgan Housel, a columnist at The Motley Fool, is a two-time winner, Best in Business award, Society of American Business Editors and Writers and Best in Business 2012, Columbia Journalism Review.


Previously:


Biases that make you a bad investor

Nine financial rules you should never forget

Gaining from financial destruction

How to read financial news

Housing: Partying like it's 1925

A rebuttal to student loan horror stories

CONGRATULATIONS: We just saved half a trillion dollars

End this crazy tax: It will boost the economy

Medicare: A dangerously good deal

Economic future looks bright

The Biggest Threat to Your Portfolio (It's Not What You Think)

Bond Market Bull Run dead at 30



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