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Tuesday, March 23, 2004

Record gasoline prices 

AAA says that the average price of a gallon of regular gasoline is at an all-time high.

The average price for regular gasoline at the nation's pumps was $1.738 per gallon, up less than a cent from the previous record hit last September, according to the motorist group's survey of more than 60,000 stations.
It's true that in money terms, gas prices are at a record high. In real terms, however, we've got a long way to go before we even approach record territory. Prices would have to increase by almost a full dollar per gallon in order to match the constant-dollar high of $2.75 (2002 dollars) set in 1981. (UPDATE: Make that $2.94 in current dollars, per an addition to the article above.) Since 2003 saw record-low inflation, 2002 dollars are close enough to current dollars that the comparison holds.

We're a whole dollar below the record high gas price in real terms, but how many Americans bother to think about prices that way? How many of them realize that gas prices have been trending downward for fifty years? Very few. It's much easier to read a headline about "all-time high" prices and get outraged than it is to actually think a little.
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