Price of Gas

Discussion in 'Off-topic' started by Malum Prohibitum, May 30, 2006.

  1. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    The AJC business section has an article today on people's reactions to the price of gasoline. The most interesting one was an older guy who commented that two-something a gallon was not so bad. When he first started buying gas, he said, it was 20 cents a gallon! :shock: BUT, he added, he was earning only two dollars a day!

    When he retired, he was earning two hundred dollars a day. "Three dollars," he said, "is not so bad for a gallon of gas."
     
  2. ls1ssdavid

    ls1ssdavid New Member

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    For me a tank of gas is almost an 1/10th of my pay check. And i have to fill up once a week ususally. Thats 1/5th of my measly pay going to gas. :roll:
     

  3. GeorgiaGlocker

    GeorgiaGlocker Romans 1:16

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    When I started driving, gas was 29 cents a gallon and I was bagging groceries at Piggly Wiggly. Minimum wage back then was $1.90 an hour and I thought that was great money!
     
  4. jrm

    jrm Sledgehammer

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    Regardless of what years you compare, you have trouble making a case that gas prices are in line with inflation. I, too, remember 20-cent gas from the 60s. I don't think inflation over the last 40 years amounts to a 15-fold increase. Plus, gas in GA was just 1 dollar 6 or 7 years ago. Inflation over the last 7 years has not been a 3-fold increase. As a function of portion of pay spent on gas, gas costs more now than it did in recent decades. That may not be true of energy generally, though. It seems to me that electricity costs have been relatively stable over the years, with just modest increases.
     
  5. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    Well, John, if you want to pick an abnormally low period (last six or seven years - I saw it under a dollar at some point in the last decade) and use that as your "inflation model," then I will feel free to pick from a high period.

    Gas from 1980, adjusted for 2006, would be $2.94 (2006 dollars).

    :p
     
  6. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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  7. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    This one is pretty neat - it has real dollars and inflation adjusted dollars on the same chart.

    http://www.randomuseless.info/gasprice/gasprice.html

    It is one guys experience in Texas (but the U.S. city average is also overlaid). It is a good visual from 1979 to 2006.


    Does anybody have one of these going back to the 30s or 40s ?
     
  8. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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  9. jrm

    jrm Sledgehammer

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    Malum, I didn't pick an abnormally low period (I gave a few years ago as an example). I started with the 1960s, where gas prices were extremely stable (a 1-cent change was unusual). As for the chart you gave a link to, it's not as believable as the long-term analysis. I'm very skeptical of its accuracy. My recollection from 1980 is that gas was about 70 cents (does anybody remember a different amount?). In order for that number to be $3 in 2005, the rate of inflation over those 25 years would have to average 6%. While there were a few years in the early 80s when inflation was that high (or higher), that was not the case for many, many of those 25 years. I'd have to see the breakdown on that calculation before I could accept it.

    On the other hand, gas was 20 cents in 1965. In order for that to be $3 in 2006, the average rate of inflation over that time would have to be 3%. This is more realistic than the case you cite.

    Finally, gas was $1 in 1999. In order for that to be $3 in 2006, the average rate of inflation would have to be 17%.
     
  10. jrm

    jrm Sledgehammer

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    Absolutely. No question that gas is cheaper now than it was 70+ years ago. The price of gas remained unchained for 40 years, making gas cheaper and cheaper as wages inflated. But, most of the people buying gas today were not buying gas in 1935. Most were buying it 7 years ago when it was a dollar. Also, in 1935, very few people cared how much a gallon of gas cost. They didn't drive to work (if they were lucky enough to have jobs).
     
  11. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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  12. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    Anyway, there is more to the original post than a "consumer price index" analysis - actually that was not in the original post at all. What most people leave out is household income. We are in an unprecedented era of wealth.

    Those of you who feel "squeezed" - just look around at the number of televisions, VCRs, lawnmowers, cars, and other stuff you have and compare it to your grandpappy when he was your age.

    Oh, and the square footage of your house (and "master bath" :lol: ).


    It is these comparisons of income to the price that I was getting at (and I found the old guy's comment interesting, and thought you guys might, too).
     
  13. jrm

    jrm Sledgehammer

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    No, I was just a good shopper.
     
  14. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    Well, let's see. I went in the military in 1985. According to 1980s flashback, gas had dropped down to $1.20 a gallon (about what I remember) from the high points of the preceding years. My monthly pay was an extravagant $590 monthly.

    A 26 gallon tank held $31.20 in gas. $590 divided equally into four parts (even though a month is really slightly more than four weeks) is $147.50.

    So, that would be 1/5 (actually a little more) of my measly pay going to gas, too. :roll:

    :D
     
  15. USMC - Retired

    USMC - Retired New Member

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    I still wear the same pair of Ray Ban "Outdoorsman" sunglasses that I bought in 1985 and still carry the P85 I bought with my dealers license in 1986, both still looking and performing great! 8)

    SIDE NOTE: A FFL cost $30 for a three year license in 1985 and you could do it from your home!
     
  16. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    Now I must fill up twice a week. Of course, with that having been said, I earn 1,412.42 times what I did in 1985, so . . .
     
  17. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    USMC-Retired, I busted up two pairs in fights and such before my wife bought me a more "up to date" style and told me I need to stop living in the 80s. I think she left my Sperry Topsiders outside in the rain to mold on purpose . . . :sly:
     
  18. jrm

    jrm Sledgehammer

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    Median household income has increased about 4.4% per year over the last 20 years. Given that more and more women are entering the work force (thus increasing household income without increasing wages), I'm not sure wages are even keeping up with inflation. If they are, they are not surpassing it by any significant amount.

    My grandfather had 2 TVs (I have 2), no VCRs (they were quite a luxury in his lifetime -- I have 1 that I paid $20 for), 2 cars (I have 2) and 1 lawnmower (I have 1). My house is about the same size as his house (bathroom, too).

    I'm not sure it's a valid comparison, anyway, given the advances in technology. We have a lot more gadgets available at cheap prices.
     
  19. Malum Prohibitum

    Malum Prohibitum Moderator Staff Member

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    John, I edited it while you were doing your post to say when he was your age.

    So you have to do it all over.
     
  20. USMC - Retired

    USMC - Retired New Member

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    Quality never goes out of style. My dad taught me early in life, buy quality tools (yes I include guns and sunglasses as tools) and treat them with respect and you will save tenfold in the long run. If you don't have the money to buy good then wait till you do.