Obama doesn't understand economics

As if it weren't already obvious, here is some additional proof that Obama doesn't understand economics.

"Let me make a point about efficiency, because my Republican opponents - they don’t like to talk about efficiency. You know the other day I was in a town hall meeting and I laid out my plans for investing $15 billion a year in energy efficient cars and a new electricity grid and somebody said, 'well, what can I do? what can individuals do?'

"So I told them something simple, I said, 'You know what? You can inflate your tires to the proper levels and that if everybody in America inflated their tires to the proper level, we would actually probably save more oil than all the oil we'd get from John McCain drilling right below his feet there, or wherever he was going to drill.' So now the Republicans are going around - this is the kind of thing they do. I don't understand it! They’re going around, they're sending like little tire gauges, making fun of this idea as if this is 'Barack Obama's energy plan.'

"Now two points, one, they know they're lying about what my energy plan is, but the other thing is they're making fun of a step that every expert says would absolutely reduce our oil consumption by 3 to 4 percent. It’s like these guys take pride in being ignorant.

"You know, they think it is funny that they are making fun of something that is actually true. They need to do their homework. Because this is serious business. Instead of running ads about Paris Hilton and Britney Spears they should go talk to some energy experts and actually make a difference."

Obviously, there are simple factual mistakes (e.g., the saving from air tires is up to 3 percent of gas used by cars, not of all oil consumption; the up to 11.2 million gallons saved of oil per day (about 267,000 barrels of oil) is just a fraction of the 1.25 million barrels of oil produced from the Outer Continental Shelf (OCS) that McCain is discussing (even if you expand it to included all things that could be done to improve gas mileage)).

So what is the problem with Obama's notion of efficiency? He only includes some costs and not others. There are 250 million cars in the US. Suppose that you would have 150 million cars having their tires checked once a week. Suppose that it takes on average 5 minutes to check the pressure on all the tires (remove the stem covers, check the pressure, fill up the tires with air when needed, put the covers back, clean your hands). If that is done once a week, it would take 750 million minutes a week, or 12.5 million hours. The average hourly wage in the US is now $18 per hour. Including workers not paid on an hourly rate, the number would be much higher. But at $18 per hour time costs on average, that comes to $225 million, $32.5 million per day. If gas prices are $4 a gallon, you would save $44.8 million (11.2 million gallons saved * $4 a gallon). Not a huge difference in the numbers.