Where Are Hyman's Wooden Shoes?

Mark Hyman just doesn’t get it.

In his most recent commentary, Hyman tells us that high gas prices aren’t really hurting consumers.

Is that right, Mark?

According to Hyman’s arithmetic, the average consumer is paying an average of $45 a month more for gas now than they were a year ago. This, argues Hyman, is a trivial amount to all but those at the “lower end of the economic ladder,” and that even for these people it’s not much of an issue since “much of that group does not own personal vehicles.”

The first problem is that Hyman is simply making things up. Of households earning between $10,000 and $25,000 annually, 88% owned at least one car. In fact, more than half of households making less than $10,000 a year owned at least one car.

Where do I get these statistics? The Bureau of Labor Statistics. Where does Hyman get his statistics? To paraphrase Al Franken, he gets them from the Bureau of Hyman’s Butt.

But why do low-income families own cars? Isn’t this just an example of the poor spending priorities of the nation’s low-wage workers?

Hardly. In fact, car ownership is often essential to finding and maintaining a job. If those “on the lower end of the economic ladder” want to have any chance of moving up a rung or two, having the access to employment that a car provides is a necessity, not a luxury.

The result is that the poorer you are, the more of your income goes for transportation expenses. Higher gas prices hit the poor and working class disproportionately. Sure, Hyman probably doesn’t notice any major hit in his family budgeting as he zips around the Baltimore suburbs in his SUV, but the working mother who has to drive to her $8 an hour job certainly does. For her, $45 a month might be the difference between having health insurance for her kids or not.

But there are still more flaws in Hyman’s figures. Hyman’s $45-a-month number is based on the difference in expenditures per car, not per household. With two working parents being the norm, these days, having two cars is also a near necessity for many families, even among the working poor. In 1992, the average household with an income between $10,000 and $25,000 owned 1.5 vehicles. There’s little reason to think this ratio has gone down since then; in fact, it’s almost certainly gone up. But let’s stick with the 1.5 figure. That means that, per household, the difference between $2 a gallon and $3 a gallon comes out to be $67.50.

If you’re at the median income for American households, you own right around 2.0 cars. That means your monthly increase is $90 a month. That’s nearly $1100 a year, which is real money to most Americans. That’s $1100 that’s not being spent on consumer goods, invested in retirement savings, salted away for children’s college education, put toward the down payment on a home, or used for any other useful purpose. It’s just going out the tailpipe of our cars.

And remember that Hyman touted the Bush tax cuts as setting the American economy “on fire” (a metaphor that only works if you cast Bush in the role of Nero). But the 2001-2003 tax cuts that Hyman trumpeted only gave the middle 20% of American households $980 back per year. For those in the bottom 20%, the tax break was a mere $230 per year.

So, the increase in consumer costs for gasoline that Hyman dismisses as trivial swamp the amount of the tax cuts Hyman has championed for so long.

Of course, intellectual consistency is irrelevant to Hyman who, like the little Dutch boy, is trying to put his finger in one of the many holes in the Bush administration’s dike.

But he’s still all wet.

And that’s The Counterpoint.

Hyman Index: 2.45