I often read where people say they'd jump an economical and powerful diesel in some smaller vehicles. I differ with you in one respect here. The attraction is in cetain vehicles and their amenties. There's no status or satisfaction in the high gas mileage itself. If they could have what they want otherwise and pay less for fuel, I do think they'd be happier.
In support of what you say, note how the demand for Toyota's hybrid dropped when gas prices dropped. Now it will go up again. We saw the same incapacity to look ahead as soon as the oil boycott and recession around 1979-1980 ended. The crisis goes, people forget everything they worried about and climb out on the same limb. Politicians are even more short-sighted.
Some of these things happen because of deliberate manipulation by the auto companies (bigger vehicles, bigger profit margins) and the oil companies (greater demand, greater revenue). They've always stifled mass transport and even played a major role in destroying it. Did you ever see the 60 Minutes report on what GM did in LA after WW II?. Realtors, contractors, the auto and oil industry, land speculators and the resort industries all had a stake in promoting suburbanization after World War II. All of this makes us very vulnerable to any oil crisis, like a man who has painted himself into a corner.
People are much the same about other things as they are about cars.
I read recently that 75 percent of Americans live from paycheck to paycheck! Of course 75 percent of people aren't poor so how does this happen?. Folks buy too much "stuff" robotically. Unlike us (I don't budget and I'm a lousy negotiatior), they'll squander less stuff on little things, buy generic cold medicine or purchasing ice cream on sale. Unlike us, they will place little figures in columns every month. Yet they never question blowing tens of thousands on big things (more house than they need especially). They need to ask, "How much pleasure am I getting from X (if any!) compared to the stress and worry it created by trying to keeping all the balls in the air?"
Most folks seem to have more tolerance for financial stress than me. I'll cut back before I'll let a financial hole get bigger or go without saving (especially 403s). Lukily I've never been attracted by big houses with lots of land. When we took advantage of a booming market to sell our townhouse in Center City Philly and moved to a relatively stable working class neighborhood (Port Richmond) five minutes from downtown, some neighbors and relatives thought we were crazy.
My wife resisted. Now she thinks it's the smartest move we ever made. It's not that we couldn't meet our financial obligations in the old neighborhood, it's just that we didn't want that much obligation. Except for 403 contributions (healthy "pay yourself first" thinking)--our savings seemed to grow like molasses. I thought, "What does it matter if you have so many amenities around you (Kimmel Center concerts, theaters, etc.) if you go rarely because too much surplus we could have is instead being siphoned off on crap --utility companies, the city revenue department, home insurance companies, etc.?" Is there an ounce of psychological "satisfaction" in that? Such expenitures are like opening up your wallet, pulling out hundreds of dollars and setting them afire.
I hate debt and now we have none because we chose to make it that way instead of continuing on the same course as our neighbors. It's a pleasure you almost feel--a nagging weight
removed, one you always could "handle" but didn't need to. We dumped a mortgage that ran over $2,100 a month and included over $9,000 for insurance and property taxes. We bought a row home for 60 K, put 90K more into features we liked, and it blows away what was in our townhouse in terms of daily satisfaction. Property tax and insurance run a mere $150 a month.
Retirement would still be far off if we were blowing all that cash on nothing.
Moving to a smaller house (1,400 sqare feet) also taught me why some full timers explain their surprise at the pleasure they got in getting rid of "stuff" they spent so much money buying and never thought they could part with. Moving made me determined to avoid accumulating lots of anything. It's heavy. It takes up room and--instead of improving the appearance of a place it makes it uglier (via clutter).
When we drive through our old neighborhood (ten minutes away by car, a world away in terms of debt), I wonder how many folks there with expensive houses and luxurycars (often leased) are knee deep in debt, yet worry about putting little aside for college or retirement. When it comes to investing, economists say having all your eggs in one basket is a bad idea. A lot of people have most of their savings in real estate.
Look up a chart on the percentage of income people have spend on housing expenses. Ideally it shouldn't be much over 20 percent. Check out the figure for San Francisco (highest in the nation). When well-paid folks have to live on what is left, they beome high income poor in some ways.
I love REAL city living and I love the real countryside but living in the burgs just isn't our taste. Give us a decent neighborhood within easy reach of a walkable Center City, or give us the countryside and hiking trails (no big treeless RV parks), especially if there is a GOOD supermarket within reach.