just procrastinating

Friday, March 12, 2004

Gas Prices
People are whining about gas prices, and it's something that I have been thinking about as well. My first thought was that even though post-Iraq prices didn't drop substantially, Bush would try to use his clout with the oil and gas folks to make damn sure that there was enough supply on the market over the election season to keep prices low. That is looking less likely. Somewhere today I read an article about a Saudi conspiracy to keep gas prices high so Bush will lose in November. Fair enough, but are gas prices really that high comparatively--here in C-ville they are $1.59--such that they would be a drain on the economy and a risk for Bush? Greg Easterbrook of TNR sets the record straight:
Another comparison: The average price of gasoline during the 1950s was about $1.80 in today's money--meaning that during the period enshrined in our collective political nostalgia as Energy Heaven, gasoline cost slightly more in real dollars than the amount now being theatrically bemoaned as a "record" price. But wait; in the 1950s, per-capita real income was less than half what it is today. That means that for the typical American in the 1950s, gasoline cost twice as much, in terms of buying power, as today's gasoline. Adjusted for inflation and for buying power, the purported "record"-priced gasoline at your pumps now is substantially cheaper than the gasoline your parents bought.
I suppose most people know this on some level; but still, cheaper is better, and perception trumps reality. The difference between spending $15 to fill up the tank and $20 might not seem like much, but it could be an issue. Thanks to Volokh for the pointer.

Weblog Commenting and Trackback by HaloScan.com