Remember a few months ago I blogged on the fact that gas prices today are lower than they were twenty years ago in comparison to median household income? As a layman, not an economist, I thought I did a decent job.
Of course, here’s an economist who does a better job, but comes to about the same conclusion. In fact, according to her data, the ratio of the price of a gallon of gas to medium household income has declined by about half. But since economics education is so poor in this country, it’s not a surprise that most people don’t understand that. All they see is “price go up, more money out of pocket”.
She also tells you exactly why oil prices rise and fall and what’s causing the present spike. It might not be what you think it is: environmental regulations, taxes, China’s rising demand, uncertainty in the Middle East, Venezuela, and Africa, and “expectations of future scarcity relative to demand and risk.”
Notice what is not on that list: Bush and Cheney funneling money to their greedy oil buddies who are gouging consumers.
But don’t believe me. Read the professor, and check her data. She’s the expert.