David Rodeback's Blog

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Life Among the Mormons, and Other Stuff

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Monday, August 9, 2004
Oil Prices in Real Dollars Aren't So High

The Big Media Acronyms are all a-quiver over the rising price of crude oil, which is reportedly higher than it has ever been. This is supposed to be bad for President Bush and good for John Kerry, or they wouldn't report it this way. (The alternative is that they are incompetent, which I will charitably disbelieve.)

The problem is that it makes no sense to compare prices over time without adjusting for inflation. When you adjust for inflation, the 1980 price of $1.25 becomes about $2.80 in 2004 dollars, well above the current nationwide average, which is about $2.00. See Jeff Jacoby's discussion of this.

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