American Proscenium

The Hidden Stability of Oil Prices

Every guy remembers the day he got his driver’s license.  Pop, a little warily but proudly, handed him the keys to the family car, and the road was open to drive anywhere in the 48 continental United States.  Of course, most guys were just happy to take a girl on a date without Pop chauffeuring.

A problem now is the cost of gasoline.  When I first started driving on my 16th birthday in 1971 in Michigan, gas cost 31¢ per gallon.  I could afford it by mowing neighbors’ lawns and working as a library page.

But I just paid $4.15 per gallon in Orange County.  At that rate it seems like an American rite of passage is over.  Guys won’t be able to afford gas for dates.  No one will get married and have kids.  The birthrate will drop to zero.  Only Prius-hugging environmentalists will be happy, as the human race extinguishes itself.

Fortunately, it’s not that simple.  According to the Bureau of Labor Statistics’ online Consumer Price Index Inflation calculator, 31¢ in 1971 equals $1.71 today.  But my father’s 1967 Oldsmobile that I drove back in 1971 got about 12 miles per gallon on the highway.  GM shut down Oldsmobile in 2004.  But an equivalent GM car today, the 2011 Buick Lucerne, gets 27 miles per gallon on the highway—2.25 times as much.

I’ll omit the math.  But if we account for inflation, better...

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