Saturday, December 27, 2014
Gas at 29.9 - the sequel
Those of us who have lived through more than just a few decades fondly remember the prices of various commodities during “the good old days”.
In 1964, the average new house was priced at slightly over $20,000
In 1964, a new Rolls Royce was priced at $16.655
In 1964, the average new car for the rest of us was $2250
In 1964, a loaf of bread was 21 cents
In 1964, a first class stamp was 5 cents
In 1964, the average price of a gallon of gas was 25 cents
In 1964, the average movie ticket was $1
When I graduated from high school a year later, the average price of a gallon of gas had risen slightly, to 29.9 per gallon. Even though that price was absurdly low, a stop at the gas station meant that an attendant would (1) fill your gas tank, (2) clean your windshield, (3) check the air pressure in your tires, (4) check your windshield wipers, (5) check your battery, (6) check your oil, (7) check your fan belt, and (8) check your radiator. On top of all that, you probably also got green stamps, and maybe even a “Shell” glass.
Believe it or not, the average price of a gallon of gas in 2014 is LESS than it was in 1965, when you factor in inflation. In 1964, $100 had the same buying power as $761.78 does today.. If you do the math, you’ll discover that 29.9 cents per gallon is equivalent to $2.27 today, and almost all stations sell it for less today. We were in Phoenix on our Christmas break, and discovered that several stations were selling regular gas for $1.99 per gallon.
Early in the 2012 Presidential campaign, Michelle Bachmann promised voters that she’d bring back gasoline at $2.00 a gallon, and Newt Gingrich promised gasoline prices of $2.50 per gallon.
The highest average price that our country has had for a gallon of regular gas was $4.10, which occurred in July of 2008, when George W. Bush was in office. In December of 2003, regular gas averaged $1.44 a gallon, which meant that the price of gasoline increased 185% in roughly a 4 year period.
Barack Obama can’t take credit for our current gasoline prices, just as neither Michelle Bachmann or Newt Gingrich could have taken credit if (God forbid) either one of them got elected, since gasoline prices are governed by a worldwide petroleum market.
When gasoline prices were at their peak, so was the price of crude oil, which peaked at $146.41 per barrel in June of 2008. Today, a barrel of crude oil sells for less than $60, a level that makes drilling in the Arctic Sea or in the Alberta tar sands unprofitable.
Since Obama can’t take credit for gasoline prices, it’s worthwhile to consider the things that he CAN take credit for.
As of December 23, the U.S. Economy was growing at an annual rate of 5%, a level that hasn’t been achieved since 2003.
As of December 22, the percentage of the American population that didn’t have health insurance dropped to 11.3%, the lowest number in our country’s history.
The current Federal deficit is at the lowest level it’s been since 2008, the year before Obama took office.
In November, the unemployment rate was 5.8%, the lowest it’s been since July of 2008, also before Obama took office.
The annual inflation rate at the end of 2013 was 1.5%. With the exception of the recession year of 2009, the last time that the annual inflation rate was less than that was in 1964, when it was 1.3%.
Less than a week ago, the Dow Jones Industrial Average hit 18.100, the highest level in our country’s history.
What's truly amazing about these accomplishments is that Congress had very little to do with any of them. The 112th Congress is officially the least productive Congress in recent history and the 113th Congress is not far behind. The St. Louis Federal Reserve has estimated that the economy would be larger by $529 billion (roughly 3%) if congressional Republicans had cooperated with the President.
With all that good economic news, you’d think that the current occupant of the White House would get a few “attaboys”, or at least a few kind words.
On November 21, House Speaker John Boehner filed a lawsuit against President Obama, essentially for doing his job. Since there is no actual valid reason for a lawsuit, Boehner has been having difficulty finding a law firm to represent him.
Even though Boehner’s lawsuit isn’t going any where, a CNN survey found in July of 2014 found that 57% of the Republicans polled favored impeachment, even though a clear majority of the American public thought it was a truly crazy idea.
I’ve given up trying to understand politics, and I’ve also given up trying to understand a lot of other topics as well. For the time being, I’m simply going to enjoy our cheap gasoline.
Let’s let the good times roll.