Gas Prices Now and Then

Tibor R. Machan

Cologne, Germany. During the last several years that gasoline prices posted at pumps were steadily rising I have run across a few obscure articles, mostly produced by economists, which claimed that the actual price of gasoline is now lower than it was back in the 1970s when we had the nuisance of all those long lines at gas stations. I am no expert at this stuff but I have noticed something that seems to lend credence to the economists' claim: there are innumerable huge SUVs, minvans, and similar gas guzzlers still all over the road in my neighborhood and wherever I have been doing some driving (Florida, Washington, DC, Maryland, Alabama, Georgia, Louisiana, and South and North Carolina).

While the posted prices are, of course, huge compared to what they used to be, it appears, from what these economists tell us, that the actual percetage of people's income spent on gasoline is less now than it used to be some thirty years ago. And given how many folks are hanging on to their gas guzzlers, it looks like the economists are right.

What is puzzling me to no end is that virtually nothing about this is discussed in mainstream media. No front page article has appeared in The New York Times, The LA Times or other papers with which I am familiar, and certainly none of the TV news programs have sent out reporters to check out the economists' contention. Why? Is there something to be gained by the press from hiding from readers and viewers the possibility, even probability, that there really is no extraordinary oil crises? What if it is all as it had been for several decades now, neither a smooth ride yet not as bumpy one as mainstream opinion would have it? Is there something dangerous about letting folks know that the real price of gasoline is actually lower than it was back in the early 1970s when in today's dollars gasoline cost about $6.50 a gallon?

Of course, gasoline has been quite a lot more expensive in Europe than in the US for decades on end. And the difference is still evident. So Europeans do tend to drive much smaller cars than Americans. Even allowing for the fact that changing from a big to a smaller or really small vehicles is not going to happen overnight, no major adjustments are evident on America's roads. What change has come about can be written off as panic reaction instead of prudence. Of course, for some people adjustments may be warranted, but that's true anytime, given that the market favors different producers and consumers based on productivity, the fluctuation of supply and demand throughout the economy.

Nevertheless, it seems that oil prices, though high, aren't actually higher than they have been for decades. So why is this not explored by investigative journalists across the land?

Perhaps the answer is simply that good news is no news. So if there is no oil crises then writing and talking about oil is worthless from the viewpoint of the media. No one makes a big deal of the fact that there haven't been many air crashes in recent years--no headline blares that "Millions of passengers have reached their destination safely." On the other hand should there be one or two crashes, this is going to be major news everywhere even if on average flying is far safer than, say, driving and ride bicycles.

Perhaps the lesson from this is that hardly anything one reads in newspapers or views on TV should be taken at face value. One needs a healthy dose of skepticism whenever one relies on conventional news sources. But maybe there is an opportunity here as well: given that so many newspapers are having economic difficulties now, what with the Internet posing a major challenge to their economic base--namely, advertising (especially classifieds)--some experimentation with reporting more good news may be the answer.