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A Gas Of A Surprise

Mike

Well-known member
New York Times
A big surprise on gas
You may not believe it, but fuel is more affordable than it was during the early '60s.
By Indur M. Goklany and Jerry Taylor
August 11, 2008



Barack Obama thinks the government should intervene on gas prices to "give families some relief," and last week called for releasing 70 million barrels of crude from the Strategic Petroleum Reserve. John McCain proposes an end to the ban on offshore drilling and has pushed for a gas-tax holiday because "we need it, we need it very badly."

But both candidates and the public are evidently unaware of a basic fact: Gasoline is more affordable for American families now than it was in the days of the gas-guzzling muscle cars of the early 1960s. Prices are beginning to come down somewhat, but this was true even when the national average was at its summer peak.


Two-thirds of American voters say they think that the price of gas is "an extremely important political issue," and many believe that it will cause them "serious" financial hardship, according to a recent survey by the Associated Press and Yahoo.

Although it's true that the real (inflation-adjusted) and nominal (posted) prices of gasoline are higher than at any time since World War II, even at the recent peak national average of $4.11 a gallon (California's average Friday was $4.17), gasoline is still more affordable today than it was during the Kennedy administration. Federal Reserve Chairman Ben Bernanke worries that increasing fuel prices might eat up so much disposable income that it flat-lines consumer spending and tanks the economy. But it's difficult to square that worry with what we call the "affordability index" -- the ratio of the average person's disposable income to the price of gasoline.

After studying the average yearly price of gasoline from 1949 to 2007, and assigning the number "1" to the ratio in 1960, we found today's prices comparable to what they were in 1960 (1.35 today to 1.00 in 1960, with a high of 3.32 in 1998). The higher the gasoline affordability index figure, the lower the price of gasoline relative to disposable income.


Consumer anger about rising fuel prices has taken a while to build because, until the last year or so, the increases could be shrugged off as natural year-to-year price variation. Moreover, pump prices still seemed relatively cheap given increases in personal wealth. Personal disposable income since 2000, for instance, has increased by an average of about $4,800 a person. Those very real increases in economic well-being reduced the pain of higher prices at the pump. People didn't notice that real gas prices were higher because the percentage of their income going to the gas station was at an all-time low until recently.

The bad news for politicians is that motorists are noticing now. We are bombarded with reminders, from nightly newscasts to front pages, that gas is more expensive now than it was in the late 1990s. Ask Americans the price of milk, bottled water or orange juice and many won't have a clue. But virtually every American of driving age sees the large signs proclaiming the price of gas at street corners every day, and has watched the dial on the gas pump tick up to $40, then $60 or higher as they fill their tanks. The bill is high, and it is drilled into our heads.

But perception is not reality where gas prices are concerned. By June of this year, disposable income had risen by an average of $1,627 per person over last year's figures, according to the Department of Commerce, while the average person's real expenditures on gasoline increased by about $490. Our incomes are still outpacing gasoline price increases. The problem is that our incomes aren't outpacing the increase in gas prices lumped together with increases in everything else -- air conditioning, food, etc. Our homes, meanwhile, are losing value.

But gasoline is more affordable than it was during the early 1960s, an era fondly remembered by many as halcyon days of cheap fuel and gas-guzzling American cars. We're overlooking that context because it's easier to remember 1998, when we saw the lowest inflation-adjusted gasoline prices in recorded history.

Politicians would do well to remember these historical facts, as well as consumer psychology, when discussing gas prices with voters. Failure to do both will likely result in a government eager to score political points with the electorate by doing exactly the wrong thing.

Indur Goklany is the author of "The Improving State of the World: Why We're Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet." Jerry Taylor is a senior fellow at the Cato Institute.
________________________________________________________

One thing this author fails to explain though, is the amount of money sent out of this country each year for oil purchases is breaking the bank.

We need more drilling!
 

hopalong

Well-known member
aplusmnt said:
Bullhauler said:
Damn it only took you TWO minutes to reply. For the record I never read ANYONES copy and paste crap.

But you post crap twice in one day about someone pasting it? :shock:

Try counting Oldtimers cut and pastes in the same period of time????

Oldtimers posts per day number 10.83 in this forum alone :roll: :roll: :roll:

Mike is a lowly 7.18 and has far far less cut and pastes the the aformentioned KING of cut and pastes, barely ahead of fff!

:D :D :D
Have trouble counting?????? :roll: :roll: Or just have a problem with rebuttals???
 

fff

Well-known member
What a crock. He bases his whole theory on "disposable income" and "affordability index." Income has not increased across the board. We've made a lot of new millionaires the last few years, but increases in the income of middle and low income people have been slight, or even stagnant when you consider inflation. This may make you feel good, Mike, but it doesn't help lots and lots of people who have given up dinner out and a movie so they can fill the tank and get to work every day.
 

Mike

Well-known member
fff said:
What a crock. He bases his whole theory on "disposable income" and "affordability index." Income has not increased across the board. We've made a lot of new millionaires the last few years, but increases in the income of middle and low income people have been slight, or even stagnant when you consider inflation. This may make you feel good, Mike, but it doesn't help lots and lots of people who have given up dinner out and a movie so they can fill the tank and get to work every day.

We should take your word over a "Senior Fellow" at the Cato Institute?

You're pretty funny. Wait, I take that back.......you're REAL funny. :lol: :lol:
 

fff

Well-known member
My word about what? I don't doubt his figures are accurate. He's averaging income increases across the board. But income increases haven't been across the board.



The past three decades have seen a momentous shift: The rich became vastly richer while working-class wages stagnated. Economists say 80 percent of net income gains since 1980 went to people in the top 1 percent of the income distribution, boosting their share of total income to levels unseen since before the Great Depression.

Despite the historic magnitude of this shift, inequality has thus far had little traction as a political issue. Many Americans seem to accept the conservative view that escalating inequality reflects “free market” forces immune to amelioration through public policy. As Treasury Secretary Henry Paulson put it, perhaps a bit defensively, the growing income gap “is simply an economic reality, and it is neither fair nor useful to blame any political party.” Paulson’s assertion, however, is strongly contradicted by the historical record. While technology, demographic trends and globalization are clearly important, purely economic accounts ignore what may be the most important influence on changing U.S. income distribution — the contrasting policy choices of Republican and Democratic presidents.

The Census Bureau has tracked the economic fortunes of affluent, middle-class and poor American families for six decades. According to my analysis, these tabulations reveal a wide partisan disparity in income growth. The real incomes of middle-class families grew more than twice as fast under Democratic presidents as they did under Republican presidents. Even more remarkable, the real incomes of working-poor families (at the 20th percentile of the income distribution) grew six times as fast when Democrats held the White House. Only the incomes of affluent families were relatively impervious to partisan politics, growing robustly under Democrats and Republicans alike.

The cumulative effect of these partisan differences is enormous. If the pattern of income growth under postwar Republican presidents had matched the pattern under Democrats, incomes would be more equal now than they were in 1950 — a far cry from the contemporary reality of what some observers are calling a New Gilded Age.

It might be tempting to suppose that these partisan differences in income growth are a coincidence of timing, merely reflecting the fact that Republicans held the White House through most of the past three decades of slow, unequal growth. The partisan pattern, however, is remarkably consistent throughout the postwar period. Every Republican president since Dwight Eisenhower presided over increasing economic inequality, while only one Democrat — Jimmy Carter — did so. (I allow one year for each president’s economic policies to take effect, so the recession of 2001 is counted against Clinton, not Bush.)

If middle-class and poor people do so much better under Democratic presidents than under Republican presidents, why do so many of them vote for Republicans? One popular answer, advanced by Thomas Frank and others, is that they are alienated by Democratic liberalism on cultural issues like abortion, gay marriage and gender roles. This does not appear to be the case. In recent presidential elections, affluent voters, who tend to be liberal on cultural matters, are about twice as likely as middle-class and poor voters to make their decisions on the basis of their cultural concerns.

A better explanation for Republican electoral successes may be that while most voters, rich and poor alike, do vote with their economic interests in mind, they construe those interests in a curiously myopic way. Their choices at the polls are strongly influenced by election-year income growth but only weakly related to economic performance earlier in the president’s term. And while Republicans have presided over dismal income growth for middle-class and poor families in most years, they have, remarkably enough, produced robust growth in election years.

Why have Republican administrations typically presided over strong election-year growth? The pattern probably reflects the fact that presidents have more clout early in their terms than at election time. Republicans have often used that clout to rein in inflation and social spending, producing or prolonging economic contractions that then wear off by the time of the next election. New or newly re-elected Democrats, for their part, have frequently stimulated the economy and expanded employment, producing economic booms that raise all boats in their second and third years but trail off as the next election approaches. As a result, even working-poor families have experienced stronger income growth under Republicans (1.8 percent) than under Democrats (1 percent) in election years.

This year looks unusual in this respect, with slow growth likely despite the infusion of substantial tax rebates from an election-year stimulus plan. If that slow growth produces a Republican defeat in November, it will be a rare instance of economic accountability for a party with a long history of delivering meager income gains for most American families.

Larry M. Bartels, a professor of politics at Princeton, is the author of “Unequal Democracy: The Political Economy of the New Gilded Age.”

http://www.nytimes.com/2008/04/27/magazine/27wwln-idealab-t.html

You can post all the excuses and tables and articles from whoever you want. People know they're not getting their share of the American pie, even though they work hard every day. Coming up with an "affordiability index" isn't going to cut it with people losing their homes.
 

Mike

Well-known member
Coming up with an "affordiability index" isn't going to cut it with people losing their homes.

Looks like the Affordability Index should have been employed by those allowing so many to have homes that couldn't afford them. :roll:
 

Larrry

Well-known member
People know they're not getting their share of the American pie, even though they work hard every day

So people KNOW this, how do they know> is it written down someplace, the constitution maybe/ :roll: so enlighten us to how people know what their fair share is. Who determined what ones fair share is?
A little exercise for you, what form of government do you call it when a higher authority determines our fair share?
 

Sandhusker

Well-known member
Frankie, 'Coming up with an "affordiability index" isn't going to cut it with people losing their homes."

Maybe those who are losing their homes should of employed a known-to-only conservatives tool called a BUDGET to see if they could afford payments? Here’s how it works; You go back and look at all the bills that you’ve been paying such as car payments, food, utilities, insurance, etc…. and then add what the new home will cost you, compare that to your income, and if your income is the smaller number, YOU DON’T SIGN THE PAPERS. If you’re getting into a variable mortgage, you do the exact same with the potentially higher rate. Again, if payments are larger than income, DON’T SIGN THE PAPERS. Signing those documents means that you understand what you’re getting into and you’re agreeing to the terms. To get hung on the deal afterwards and then blame somebody else because you didn’t do your own homework or didn’t bother to ask a question is a tactic that is used by liberals everyday. They don’t understand the concept of personal responsibility, they’re like a bunch of children.
 

TSR

Well-known member
Larrry said:
People know they're not getting their share of the American pie, even though they work hard every day

So people KNOW this, how do they know> is it written down someplace, the constitution maybe/ :roll: so enlighten us to how people know what their fair share is. Who determined what ones fair share is?
A little exercise for you, what form of government do you call it when a higher authority determines our fair share?

What form of government do you call it ....? I'd say the one we have today has had a lot of influence on who gets what, by its dealings with the corporate world.
 

nonothing

Well-known member
Sandhusker said:
Frankie, 'Coming up with an "affordiability index" isn't going to cut it with people losing their homes."

Maybe those who are losing their homes should of employed a known-to-only conservatives tool called a BUDGET to see if they could afford payments? Here’s how it works; You go back and look at all the bills that you’ve been paying such as car payments, food, utilities, insurance, etc…. and then add what the new home will cost you, compare that to your income, and if your income is the smaller number, YOU DON’T SIGN THE PAPERS. If you’re getting into a variable mortgage, you do the exact same with the potentially higher rate. Again, if payments are larger than income, DON’T SIGN THE PAPERS. Signing those documents means that you understand what you’re getting into and you’re agreeing to the terms. To get hung on the deal afterwards and then blame somebody else because you didn’t do your own homework or didn’t bother to ask a question is a tactic that is used by liberals everyday. They don’t understand the concept of personal responsibility, they’re like a bunch of children.


I say Blame the Bankers.Lets face it,no where will you find greed working stronger than in a bank....Nothing but nickel and diming people at banks.I am surprised they do not charge 5 bucks a signature,just for the amount of ink the pen used.....
 
A

Anonymous

Guest
Whats really comical is the $Zillions the energy industry (Exxon Mobil, Western Energy, etc) are spending on buying advertisements on TV during the Olympics--portraying themselves as our bestest friends and the nicest folks in the world....

Now if your in my area- you don't have a choice on energy- only one company supplies natural gas- one supplies electricity- and one refinery produces the gas and diesel--- so advertising does them no good- except they want to try to rid the image they have made of themselves as being greedy money grubbers...While the one CEO was giving his little spiel (with his hand on the shoulder of a little kid), I wish they would have flashed his multi million dollar salary across the screen...

They could do this better with me if they spent those $Zillions lowering the price of oil and the gas and diesel I buy- rather than spend it on advertising or profiteering..... :wink:
 

Larrry

Well-known member
What form of government do you call it ....? I'd say the one we have today has had a lot of influence on who gets what, by its dealings with the corporate world.

That is answering a question with a question. Please answer my question even though it wasn;t directed at you I would love to hear your answer. Along with ffffffffffffff.
 
A

Anonymous

Guest
TSR said:
Larrry said:
People know they're not getting their share of the American pie, even though they work hard every day

So people KNOW this, how do they know> is it written down someplace, the constitution maybe/ :roll: so enlighten us to how people know what their fair share is. Who determined what ones fair share is?
A little exercise for you, what form of government do you call it when a higher authority determines our fair share?

What form of government do you call it ....? I'd say the one we have today has had a lot of influence on who gets what, by its dealings with the corporate world.

We now have more of a Corporate Fascism than anything else- and the 7+ years of the King George monarchy have moved us the closest to losing our Republic than we've ever had before...

Outside Independence Hall when
the Constitutional Convention of 1787 ended,
Mrs. Powel of Philadelphia asked Benjamin Franklin,
"Well, Doctor, what have we got, a republic or a monarchy?"
With no hesitation whatsoever, Franklin responded,
"A republic, if you can keep it."
 
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