Don’t piss on my leg and tell me it’s cheap gasoline
Today I purchased my first $40 tank of gas. Based upon the meter on the pump that I used, the person that preceded me had just driven away with slightly over $76 worth. On Saturday I was talking to an acquaintance who has a Hummer H2. He estimated that he will spend approximately over $6500 this year on gas for the pleasure of driving a pimped-out military vehicle down to Target to buy Snapple.
But speaking from the rarified air of Mt. Axiomatic comes the phlegmatic intonations of George Will who tells us to quit our whining. We’ve never had it so good:
…a recent headline in the Financial Times proclaimed: “New York investors take flight after price of oil hits record high.” But the story’s fifth paragraph read: “West Texas Intermediate for September delivery settled $1.83 higher at $64.90 a barrelâ€”a new nominal record …” The real meaning of the word “nominal” is: “The headline you just read is rubbish.” As was the next day’s page-one headlineâ€””Oil price hits $66 for a fourth record of the week”â€”which was nullified by the story’s first words: “Oil prices yesterday broke their fourth consecutive nominal record for the week …”
For the price of oilâ€”not in nominal dollars but real, inflation-adjusted dollarsâ€”to surpass the record set in January 1981, it would have to be $86.72 per barrel. Last Friday it was $65.35. For headlines about “record” gasoline prices to be accurate, a gallon would have to cost $3.12. Last week the national average reached $2.55â€”less, in real terms, than in March 1981, when the price in today’s dollars was $3.11. Or, for that matter, in 1935, when the price was $2.67. Which explains one of the least mysterious “mysteries” of the momentâ€”why, in spite of “sky-high oil prices” (Fox News) and “skyrocketing” gas prices (CNN), people are, according to AAA, driving more.
Now it may be that George Will is still hanging on to some of those 1981 dollars (which would explain why he keeps wearing those moldy bowties left over from the sixties because, dammit, they’ve just got to come back in fashion unless that little prick Tucker Carlson fucks it up for everyone), but for a country with stagnant wages coupled with increasing housing, medical, and energy costs, this is going to take a bite out of consumer spending which is what really drives the economy. Economists can debate whether there is or isn’t a housing bubble (my anecdotal inflation adjusted two cents : I bought my house eight years ago for $200,000. A similar home two doors down which has about 200 more square feet just went on the market last week for $975,000. What do you think?) but the fact is that many people have put themselves near underwater by refinancing and using up their inflated equity to feed their consumerist urges. Throw in rapidly expanding higher energy costs and soon soccer moms driving their TerraCrusher XLT will discover that even if they do decide that they could live with a smaller and more fuel-efficient vehicle to haul Brody and Aspen to Tai Chi class, their SUV will be underwater as well at trade-in time. Congratulations on your brand new $30,000 economy car.
And should we mention the families that have had to move out past the suburbs to find affordable homes in outlying communities only to have to drive 100 miles each day to get to and from their jobs? Five and six dollar a gallon gasoline? You do the math.
After continuing his argument using the suspect unemployment rate (since people who have given up looking for a job simply cease to exist) and productivity numbers, Will nimbly skips mentioning the Battle of Inigo Montoya Money Black Hole but not without leaving himself an escape vehicle:
Still, various voices warn that parts of the economy’s improvement are “temporary.” Well, yesâ€”isn’t everything? During a broadcast 14 years ago, Vin Scully, voice of the Los Angeles Dodgers, said, “Andre Dawson has a bruised knee and is listed as day-to-day.” (Pause) “Aren’t we all?”
Normally I would call this whistling past the graveyard, but with a graveyard filled with waiting empty graves with headstones that read Low Savings – High Debt – Huge Deficit – The Cost of War, you have to wonder if Will isn’t instead doing a drive-by in a black Cadillac Escalade, 13 MPG in the city…with a tailwind.