Demand destruction. Back in June as gasoline was heading over $4.00/ gallon I could see it and hear it and read about it coming. I could hear it coming when my wife was calculating the cost of the gas to go to visit family. "It cost me $8.00 each way!" she would say. This from a woman who a year earlier would say "Who's got time to drive out of the way to save $.05 cents per gallon". I could hear it coming at the gas station when people I did not even know were striking up conversations with me about the cost of filling up their cars. I could read about it coming when blogs were discussing "hypermiling", the merits of hybrids and were they cost effective. I could see it comiing on the road when people were coasting to traffic lights, accelerating slowly, driving at slower speeds and generally not getting out of the way.
Demand reconstruction. Here we are just four months later, and I have not read a post about "hypermiling", "hybrids", or how to get the best mpg's out of a car in two months. Noone has mentioned a word about the high cost of gasoline as it has returned to within pennies of last years October price. Of course that is still a 50% increase from Oct. 2006. The slow accelerations are gone, as is the coasting to stop lights and the average speed on the LIE is 70mph again when traffic allows.
I wonder if any of that will affect demand?