Gas

It’s obvious, but it nonetheless bears repeating:

In constant dollars (i.e., adjusted for inflation), current gas prices do not yet approach the peak price attained around 1980. As I tell my students, a barrel of oil cost about $2.50 at the beginning of the 1970s and ended the decade at around $40. Soon afterwards, there was a glut of oil on the market and prices collapsed.

Having recently found myself back in the gas market, I can confirm that it’s mildly irritating to pay $2.50 for a gallon. That doesn’t excuse the kind of nonsense on gas prices that we typically hear in the media.

I’m largely in sympathy with Erik in his call for higher gas taxes. My sympathy isn’t total, because gas taxes tend to be regressive, and, given the construction of the modern American city, higher gas prices tend to make life a lot harder for the working poor.