Oil Prices Are NOT THAT HIGH.

When you adjust the price of oil (and thus, gasoline) for inflation, relative to the past its merely more expensive than it was -- but not outrageously so. Indeed, energy now consumes about 2-3% of GDP, down from 15% (if memory serves me) 30 years ago.

quote from http://www.fullermoney.com/content/2004-06-29/EconomicDevelopmentsLeavingExperts290604.pdf

"When one hears the numbers which show the U.S. economy currently squeezes more than twice the amount of real GDP from a barrel of crude oil than it was able to in the 1970's, the distinct impression of less dependence upon crude oil is conveyed... has pumped up its level of real GDP to the enormous size we see today, but with crude oil still inseparably intertwined at virtually every level of economic activity. As such, by squeezing more than twice the real GDP from every barrel of crude oil, the U.S. has dramatically increased the leverage that each barrel of crude oil enjoys over the GDP."

Whose side are you on?

Does supporting John Kerry mean that it's heresy to report facts that most people don't know about? If it does, we're no better than Faux News.

When I go fill up my 4 cy Oasis and drive the 25 miles to work one way it hurts my family budget when gas is 1.90 a gallon. It hard work being a sinking middle class person. 1/3 of my salary either goes to daycare or healthcare. Gas is just another thing that gives me red arse. Give me ethanol or give me death!

with it SOOOOOOOO much happier :eyes:

they're making the same amount of the crap, spending the same amount of $$ to pump out the crap, but their crap has tripled in price.

they're very very happy and you can bet they want their colleague and friend GWB to stay in power

except that it's going straight into the pockets of *'s oil buddies.
Record prices for oil and gas, record profits for the oil companies.

Speaking of household budgets, the amount spent on gas and heat has gone up while wages have not.

We're fucked either way. :bounce:

Can everyone please wait until November 3 to show how clever they are?

On edit, the chart also shows a 3x increase since Bush took office. High enough?

...shows a price below $50. Last I checked, it was over $54.

The main point still stands -- except that, this time, Peak Oil is a not-so-distant reality; also, there is much more reason to be pessimistic about short-term prospects in the ME than there ever has been before.

But I'll let someone who knows more about this than I speak.

but with crude oil still inseparably intertwined at virtually every level of economic activity. As such, by squeezing more than twice the real GDP from every barrel of crude oil, the U.S. has dramatically increased the leverage that each barrel of crude oil enjoys over the GDP."

That's twice the previous level. The US is still much less energy efficent than most of our competitors, meaning energy use is an competitive drag. And individual consumption has gone up, too, so the cost per barrel has to be adjusted by increased demand. JMO.

Then oil prices declined slightly, but were greatly declined in inflation-adjusted prices.

(I'm with you. It still makes a great campaign issue)

What you show here is that prices have only been higher when there has been threatened supply disruption, and in fact, prices are higher now than they were during the 73 oil embargo.

No, it's a problem.

how much is a barrel, anyway?

. . . it's double what it was in 1994.

and that has a significant economic impact.

The only reason it is not more noticeable is that productivity is up.

And that's caused by a significant loss of jobs - real unemployment is between 7 and 8% - meaning people are working significantly harder for very little increase in pay, as real wages are falling.

So who benefits?

Big oil. Military contractors. Capital.

If you're just a wage-earner you are getting screwed.

To me, adjusted for inflation immediately signifies "spin".

On edit: Oh, and how accurate can it be to compare "adjusted for inflation" (years ago) to actual figures (today)?????? Makes no sense.

Oil prices ARE high. Every damn day, the cost of gas eats up a bigger and bigger part of the paycheck. In 1970, there were fewer dual income families, fewer two car families, and people did not live in McMansions that suck energy like starving hogs. They did not drive kids to playdates, or to the mall every day, or commute a kazillion miles to work. Play? Go outside with your friends. You need to go to a softball game? WALK! Gotta get to the library? Hop on your bike, kid. Those days are long gone.

People used way less gas than they do nowadays, so they did not have to fill the tank every other day. By 1980, more families had two workers, but everyone I knew had at least one fuel efficient car. The HUSBAND usually got the jazzy gas guzzler, and the WIFE had the little runabout, which the HUSBAND would steal whenever gas prices went up, and the wife would bitch--stop taking MY car!

No one rides a BIKE or takes a BUS to school in the 'burbs anymore (and if they do, many school districts CHARGE for the ride now), they ride their used SUV that mom got them for their 16th birthday. And that pig of a car always needs a drink. MOM, I NEED GAS MONEY!!!

People are HOOKED on oil, thanks to weecowboy's unwillingness to do anything, even lead by example, to reduce consumption or dependence.

With progress, you usually see price REDUCTIONS, not increases. Automation, technological improvements and other effeciencies should make prices lower, not higher.

Back in 1972, you could buy a Texas Instruments calculator that multiplied, divided, added and subtracted and did square roots, for about two hundred bucks. They were bigger than a pack of cigarettes, heavy enough to tear your shirt pocket, but everyone thought they were so tiny and cool. Nowadays, when you get a checking account, they give you a calculator for FREE the size of a credit card that can compute trajectories to the moon. I never saw a shift in calculator prices, where one day they went down to a hundred bucks, and then the next week they cost twenty or thirty bucks more. The trend kept going downward. Same with stereos, televisions, microwave ovens, or peaches in winter.

Why not oil??? I'd say because it is liquid crack with massive profit potential--get everyone hooked, in a groove, using way too much of it and not able to do without it, and then jack up the price. What are you gonna do? Kick the habit? How will Little Johnny get to school? How will we heat this foyer with the fifty foot ceiling that no one spends more than two minutes in each day?

When you look at how much more as a percentage of income that the cost of gas is taking out of the paycheck of the average working slob, those 'percentage of GDP' numbers mean nothing. We're spending a fortune on a bullshit war that was designed to grab all the oil, but failed in that goal miserably. We would still have that money had we not pranced into Iraq expecting to be greeted as liberators, while "insurgents" or "terrists" blow up pipelines every day to beat the band and ruin our fun. We thought we could go in there and increase capacity to keep the price of oil down, but we didn't count on the lousy greeting that we got after we let the whole country riot and run lawless, and only guarded the oil fields. They saw our game the second we did that, and they decided that they were not going to make it an easy adventure.

And our good pals, the Saudis, are pumping out shit sour oil to "make up" for the shortfalls. Oil that takes forever to refine--thanks a lot, Bandar.

Figures lie, and liars figure. The only number that means anything to Americans is how much cash they have to pull out of their wallets to fill their tanks. And they have way more tanks to fill in the 21st Century. And that amount ain't a shrinking percentage of their personal GDP. That number is going up, UP, UP.

What a GOP argument--let me pee on your leg (with my hand in your wallet), and tell you it is raining, like Judge Judy says!

Sure, they're not as bad as they were in the late seventies, but we were in a near depression because of those.

We HAD relatively great oil prices...but that's going south right now as evidenced by the graph.

The only possible news that will help will be any or all of the following:

1. Lazy ass oil companies truly do invest in technologies to get greater yields out of existing wells.

2. Our government doesn't continue to seek out supposed cheap oil sources around the world or have to invest 1 Trillion of the national debt to exploit such sources through military campaigns.

3. Our government really does invest in alternate energy sources once gas gets to a point where there is a discernible threshold of pain to the average consumer.

4. CAFE standards should progressively call for not only greater gas mileage but reduced total WEIGHT of vehicles across the board for auto makers. The technologies are THERE. Witness new Lotus Elise which weighs abouyt 1800 lbs and goes like a corvette with only 190hp. Get the weight down....and gas goes up almost linearly.

True...comparatively...we can say over the last decade we've had it pretty good....but with the country going broke now....and if Bush gets in for another 4 years....you can pretty much forget anything positive that will happen with any of the above.

You imply that soaring oil prices aren't that big of deal while the article (polemics aside) argues that, "With respect to crude oil dependency, therefore, the U.S. economic position is very much weaker than it was in prior decades." Thus increasing prices matter - BIG TIME!!

Cheap oil is supported by our military and our kids blood.

Gasoline was 33 cents a gallon in 1964. Prices on average (except for electronics which are cheaper than they've ever been) are about ten times higher for most goods.

At that rate, to keep even with inflation, gasoline should be about $3.30 a gallon.

I hope it gets ridiculously high. We HAVE to wean ourselves from that shit. It's like heroin for his country. We HAVE to develop other sources of energy and start conserving.

It will be painful, but what we are going through today, killing people in the middle east to steal their oil is pretty painful too.