Gas today, even at $3, is relatively affordable and is actually cheaper than the decades of the 1940s, 1950s, 1960, 1970s and 1980s, when the price of gas is measured relative to our increasing household wealth. Goldilocks can handle $3 gas.
Fine – Goldilocks, Warren Buffet, and Bill Gates can afford gasoline but what about the average Joe who has little wealth and must live paycheck to paycheck? Perry does compare gasoline prices over time to disposable income per capita. Looking at mean incomes (not median) and ignoring all those deferred tax bills from the Federal fiscal irresponsibility of this Administration, we are in the same relative place as we were in the mid-1980’s. OK, but one has to wonder if this were done relative to median income with those deferred taxes factored into the calculation of disposable income how this spin that Mark Perry puts forth and Greg Mankiw endorses would actually look.
I'm curious to know what relative income would look like across those decades if the income data were compared within quintile groups seperately from one another.
ReplyDeleteI'm depending on you econo statistical types for a clearer understanding of the concept of "relative affordability." Relatively affordable for every one? Or just for those income groups that have been enjoying the most robust income appreciation.
I would like a little more information on what is meant by realitivly affordable. Just like the previous poster...How would a realitive affordable cost be created. What would it be based off of? Besides maybe consuming a large quanitiy of gas which our country could work on. The original blog is very correct....Other countries have been paying 6 or 7 dollars a gallon for gas for decades.
ReplyDeleteI paid 18 cents a gallon for gas in April 1973...filled the tank of my '65 VW for less than $2, about an hour's compensation at the then minimum wage.
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