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Thursday, May 20, 2004
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MEMO TO AMERICANS
Chill the fuck out about gas prices, okay? Historically, they're really not that bad (link ruthlessly stolen from Slings and Arrows).
Sure, the $2.03 being charged at the pump today seems high. But in actual financial terms, it's a lot less onerous than the $1.25 a gallon motorists were paying in 1980 -- a whopping $2.80 when translated into 2004 dollars. (Adjusted the other way, today's $2.03 pump price is equal to 89 cents in 1980 dollars.) When it comes to historical price comparisons, nominal dollar amounts signify little. It is the inflation-adjusted price that tells you whether the true cost of a product has increased, decreased, or stayed the same.
There's also the question of affordability. Adjusted for inflation, gasoline prices today are roughly where they were in the 1950s -- but per-capita real income then was no more than half of what it is today. Which means that for a typical driver 50 years ago, gasoline was really twice as expensive, in terms of the bite it took out of his budget, as it is now. Only in the shallow sense of nominal pump price is gasoline today "setting record after record." In reality, it is much cheaper than it used to be.
Interesting. I wonder how that works....
That is especially true over the very long term. In his 2000 book "It's Getting Better All The Time," economist Stephen Moore noted that while US energy prices fluctuate all the time, the trend for the past century has been toward ever-greater affordability. Adjusted for wage growth, the price of oil was about five times cheaper than in 1900, Moore wrote, and roughly the same as it was in 1950 -- and that was true notwithstanding the vast amount of oil and gasoline that Americans have consumed. How can gas and oil be getting more affordable when we consume so much? The secret, Moore says, is innovation and technology:
It has been precisely this kind of innovation that has confounded the doomsayers who in the 1960s and 1970s predicted global oil shortages and even depletion."
Several smart people have pointed out that energy prices are high due to a lack of refinery capacity. It might suprise some of my readers that premium unleaded doesn't come directly out of the ground. Oil does, but that has to bve refined to become gasoline. It is then further refined for purity. Here's the problem; the United States hasn't built a refrinery in over 20 years. There's a higher population, more drivers and the same, finite supply of oil....yet more gasoline isn't being produced. Oh, here's another neat line that bears repeating;
"Before the 1950s it was almost unthinkable that oil could be drilled and extracted from the bottom of the sea. In 1965, one of the first offshore oil rigs drilled oil from 600 feet deep off the coast of California. By the late 1980s, the record for offshore oil drilling reached 10,000 feet.
There is a GIANT movement to stop offshore drilling in the United States. This movement is being led by .....Republican governors. Notably two. Their names are Bush and Schwarzenegger. See, Florida and California are chock full of environmental shitheads who believe offshore drilling is evil. Those governors would like to be re-elected, so a certain Republican president who I won't name is buying out the drilling leases of the oil companies who hold them. Of course, terminating offshore drilling will lead to a few things, those being deminished supply, higher prices and the subsequent need to invade more Arab countries. All three of which the environmental movement can be reliably expected to be against.
And by the way, and Americans HATE hearing this, but they pay less for for gasoline than the part of the world commonly referred to as, "not the United States." Of course, those parts of the world that aren't Australia or Canada are very small. Take Europe for example, you can't swing a cat by the tail in your average European country without it having to clear customs at least three times. You could walk from Paris to Berlin without breaking a sweat (not that the French have done THAT since 1873), so the there isn't as compelling a need to drive.
On the other hand, maybe Americans are just bad with energy. For example, they currently occupy Iraq (commonly known as "the place oil comes from") and it doesn't even have electricity. Say what you will about Saddam Hussein, but rolling blackouts were virtually unknown under his government, as opposed to say.....California's.
None of what I've written should be intrepreted to mean that I agree with ANYTHING that stupid bastard, Michael Moore has said about anything. I have an inherent distrust of those "no blood for oil" motherfuckers. There are two things that these idiots have hat I'd like to look very closely at, their tax returns and their garages. Dollars to donuts, I'll bet you that those "give to the poor steal from the rich" idiots take every deduction they can, except for charitable ones. And can you imagine a vehicle smaller than an SUV that Micheal Moore can fit his bloated, rich ass into?
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