I tell my students that economists know more than many commentators and other social scientists. One of the pieces of evidence I cite in support is that in the 1970s many folks claimed that "Americans would never give up big cars." Unnatural affection for monster tail fins, Route 66 and the lure of the open road, yadda yadda. But economists predicted that higher gasoline prices would, at least after a time, spur both demanders and suppliers to react. And so they did. Then, after 1986 or so, when gas prices plummeted, Americans reacted again: SUVs half the size of Montana, F-250s, etc.

I look forward to talking about the latest chapter in the story: after just a few months of high gas prices, SUV sales look to be in some trouble. High mpg hybrids are in heavy demand. (And get a load of the tiny, ugly-ass car Mercedes plans to sell--for $20,000!---because it supposedly gets 60 mpg.)

In other car news, last year Toyota earned more than double what GM, Ford, and Chrysler earned, combined.