Here’s some more media mythmaking about gas prices. Has your local or national TV news or newspaper trumpeted “record prices for a barrel of oil”? Well, yes and no.
With some headlines blaring about “record oil prices,” a bit of perspective is in order. It is true that in nominal dollars, the price of crude oil has never been higher. However, in inflation-adjusted terms, the picture looks somewhat different. It turns out that the price for a barrel of oil peaked at about $98 in December 1979.
You have to compare prices over a long period adjusting for inflation. Otherwise, you’re comparing apples to oranges. It’s like saying that a gallon of milk cost 10 cents in 1965 (I don’t know if it did; I’m just using it as an example) and declaring that since today’s is $3.50 the dairy farmers are charging “record prices!” Adjust for inflation and the gigantic jump is less so.
Thus a gallon of gas today, while expensive (Lord knows, I’m feeling it too), doesn’t take as big a chunk out of the average paycheck as a gallon of gas did in 1979. And don’t forget we’re getting a lot more miles to the gallon than we did then.
It’s one thing to complain about gas prices. That’s fine because it’s an important issue. But we can do without the overblown hysteria of the media.
Technorati Tags: economics, gas prices, inflation, oil
