Soaring Gas Prices? It's all relative...

I came across this great column by John Stossel in Jewish World Review and bookmarked it. Now I can't remember who linked it, so apologies all around. If anyone recognizes the blog source, leave a comment and I'll be happy to update it.

Anyway, Stossel really gives it to the MSM about how they like to report about the periodic "gas crisis" the U.S. faces. Whether it's an attempt to make Bush look bad or make a case for some sort of "innovative" energy policy - whatever that means, the fact remains is that that way the media does it's reporting on gas prices is extremely misleading to the American people because it's never put into any context.

"Well, it's time to wake up from the gas-price nightmare. All these media people are saying the gas prices are high for one simple, simple-minded reason: They are looking at big numbers — but they are not accounting for inflation. So the numbers look bigger than the costs actually are. That's what inflation does. The reporting is irresponsible and silly. Not adjusting for inflation would mean "Shrek 2" is one of the highest-grossing movies of all time."

Now most journalism majors never took an economics class in college, so how can we expect these folks to do simple mathematical adjustments? Easy, says Stossel:

"It's not as if the reporters would have to work at doing calculations to figure this out. Not only are there instant inflation calculators on the Web, but the federal Department of Energy accounts for inflation in its annual report of gas prices. It says gas is actually cheaper now than it was throughout most of the 20th century. Yes, it's 65 cents more than it was six years ago, but it's nearly a dollar cheaper than it was for much of the 1920s and '30s — and more than a dollar cheaper than in 1980."

But far be it for a MSM journalist to trust the Dept. of Energy. I mean, aren't they in bed with "big oil"? Forget that they could always verify the information - if they ever bothered to.
Here's a little perspective. Stossel asks the average dope on the street what is more expensive - gas or water? Guess what people always answer? Gasoline, of course.

A gallon of gas is - on average - $2.00 per gallon. Water? At $1.29 per 24 oz bottle, that's $6.88 per gallon. Quite a difference, huh? Although it does make sense to have to pay more for something you actually need to live, like water? Of course, a lot of people don't think it's unreasonable to pay a dollar or more for bottled water when in fact the price is 3.5 times the cost for same amount of gasoline. Don't even get me started on the whole paying for bottled water thing, that's a topic for another time.

Here's the point:

"We should marvel at how cheap gasoline is — what a bargain we're getting from oil companies. After all, it's easy to bottle water, but think about what it takes to produce gasoline and deliver it. Oil has to be sucked out of the ground, sometimes from deep beneath an ocean, a desert, or ice. To get to the oil, the drills often have to bend and dig sideways through as much as five miles of earth. What they find then has to be delivered through long pipelines or shipped in monstrously expensive ships, then converted into three or more different formulas of gasoline and transported in trucks that cost more than $100,000 each. Then your local gas station must spend a fortune on safety devices to satisfy government regulators and make sure you don't blow yourself up. At nearly $2 a gallon (an average of 44 cents of which goes to taxes), gas isn't expensive — it's miraculously cheap!"

And Stossel doesn't even go into how ridiculously expensive gas is in the "social utopias" of Europe. With the taxes so high, a gallon of gas in Britain, France or Germany can be as high as US$4.00 per gallon.

I admit, psychologically it's tortuous to see gas prices creep over $2.00. And I have reason to bitch, seeing as CT has the most expensive gas in the U.S. because of State taxes - which they are talking about raising, BTW. But I remember when I was a teenager and gas was about $1.50 a gallon - that was more than 20 years ago.

Hey, want cheaper gas? One acronym is all you need to know: ANWR

Posted by: Gary at 04:06 PM | No Comments | Add Comment
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