

NYT graph of historical price of gas since 1920 - charzom
http://www.nytimes.com/ref/us/20070524_REFINERY_GRAPHIC.html

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BitGeek
This graph is in error. Historically the price of gas has been declining over
the period shown, if actual inflation figures were used.

The NYT uses government provided CPI based inflation- and CPI is based in part
on the price of gas, etc... and chronically under-reported... thus trying to
represent the price of gas adjusting for "inflation" measured by the price of
gas doesn't really work.

Real inflation-- which is defined as growth in the money supply- would show
that the price of gas has declined strongly over this period-- primarily
because of the effects of the "robber barrons" who drove down prices to gain
market share, and because productivity has made gas a much safer and easier
item to get from oil... though I expect in recent years the prices would be
going up because of increased government regulation and asinine
"environmental" requirements.

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ivankirigin
The real question is why people complain about the rise in gas prices. Other
prices rise and fall. Other goods are ruled by a semi evil few (diamonds,
cuckoo clocks, etc.).

I think it's because the price is posted. That's all.

If the price of milk were posted on every street corner, the braindead
megaphone of mainstream media would amplify the concern for milk prices.

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far33d
The price of milk is a _result_ of inflation. The price of gas and oil are
_drivers_ of inflation. Big difference.

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ivankirigin
Actually, inflation is caused by the increase in the money supply. While
certainly goods derived from high energy usage will become more expensive as
the cost of energy increases, that isn't the same as inflation.

Measures of the CPI that remove these derivative effects are better. They
demonstrate the true responsibility of the fed, much more than a half measure
of the cost of petroleum.

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far33d
Fed responsibility matters - but what matters more to the average consumer is
the actual dollar price of goods in relation to their incomes.

~~~
ivankirigin
The average consumer couldn't tell you why productivity matters. Productivity
happens to be the single greatest indicator of long term changes in wealth and
standard of living. The lesson learned: don't pay attention to meaningless
indicators just because the average consumer thinks they are important.

