why couldn;'t we go back to 50 cent gas ect

[LoserVonTeese]

I was thinking if we are living in a recession why couldn't we go back to 50 cent gas, 10 food items at fast food ect... is it beacuse we make too much money??? as a society.

 

[TrenchGuy]

One word: inflation.

 

[Vintage lover]

One word: inflation.

Precisely. The more money you print, the less each dollar is worth. However, when you address gas prices as a separate issue, you run into limitless political variables such as taxes, relationships with main exporters of oil, disaster (BP oil spill comes to mind), government regulations, the reasons go on for ages. And remember, when gas prices are high, ALL prices are high. After all, the giant trailer trucks that deliver goods to stores don't run on air.

 

[LizzieMaine]

I was thinking if we are living in a recession why couldn't we go back to 50 cent gas, 10 food items at fast food ect... is it beacuse we make too much money??? as a society.

When the oil market crashed last summer, gas was down to about $1.80 a gallon in some areas, which is actually cheaper in real terms than 50 cent gas was in the mid-70s.

Another big difference between oil prices now and then is commodity speculation. Oil futures weren't publicly traded until 1983.

 

[DAJE]

Because when gasoline was 50c a gallon, the average wage was $50 a week.

Or something like that: I don't know what the actual figures were, but in general when wages rise, commodity prices rise, and then wages rise again, and so on. That's inflation.

Any attempt to explain why that happens will turn into a political discussion and get the thread shut down.

 

[Chas]

The economy follows oil prices; ergo if the price of a gallon of gas is $0.50 then we are in big trouble.

 

[dhermann1]

I read Harold MacMillan's memoirs some years ago. His explanation for the Great depression was that prices fell below the cost of production. An extreme oversimplification, but still very interesting. Deflation (broadly falling prices) can be catastrophic for an economy.

 

[Paisley]

There was also protectionism, price controls, and high taxes involved in the Depression.

Re: gas prices, we've had OPEC (an oil cartel) since 1960. Cartels tend to drive up prices.

Inflation is part of the reason that we don't have 50-cent gas. The other part is that prices are all interrelated, and you can't control one price without affecting everything else. Let's say they pass a state law that gasoline can't be sold for more than 50 cents a gallon. Let's say you operate a gas station. Can you buy gas from a supplier for less than that price? If not, you'll have to shut down or sell your gas on the black market. So the govt. has to repeal the law or pass more regulations. If they somehow get stations to sell gas for 50 cents, there will likely end up being a shortage of gas.

Thomas Sowell, an economist at Stanford, has written a book called Basic Economics that explains the role of prices, among other things. You can also look up his column at jewishworldreview.com.

 

[57plymouth]

There are also more than 50 cents worth of taxes on that gasoline. Big Brother wants his share, and it's a sizable chunk.

That, and the gas companies know that we will pay whatever they charge. They can charge $5 a gallon, and we will buy it.

 

[Paisley]

Good point about the taxes.

Yes, gas and oil companies charge what the market will bear, but at some point enough people either cannot or will not pay the price that their profits go down. After all, those $4 and $5 prices came down.

 

[LoserVonTeese]

thanks... just curious...

 

[Silver Dollar]

Then again, 50 cent gas prices may be unfeasible but we can dream, can't we. Then I can go out and buy a car with a proper V8 engine and drive her like I stole her. :eusa_clap

 

[Chainsaw]

When I started driving I think we were paying 55cents for a quarter gallon, which was cheap. That was before the Gulf war. Now the prices have fallen a bit, and were paying 1dollar a quarter gallon. I still drive a V8, as much as I'd
Ike to be driving a smart car (could go from here to Montreal on 20 bucks worth of go juice). I need strong to run the highway.

 

[Big Man]

When gas was .50 per gallon I was making less than $6,000 a year working a full-time job. I don't make a lot of money now, but it is considerably more that $6,000. Gas where I live is around $2.66 a gallon today. Even at that price, considering what I make today, it's way less expensive than it was back then at .50 per gallon.

Of course the difference then and now is that then I didn't have a cell phone bill, cable bill, internet bill, insurance on four cars, etc. to compete with my gas money. [huh]

 

[Big Man]

Speaking of .50 gas ...

I remember like it was yesterday when our family was on vacation one summer. Gas just about everywhere then was around .35 a gallon. We stopped at an Esso station ("Esso", that's how long ago it was) just outside of Wilmington, NC to get gas. The attendant was just about to put the hose in the tank when my Dad noticed the price of gas at that station was .50 a gallon. He stopped the man and said, "I'll be damned if I'll ever pay .50 for a gallon of gas!

After the late 1970's we joked about that incident a lot.

 

[DAJE]

When gas was .50 per gallon I was making less than $6,000 a year working a full-time job. I don't make a lot of money now, but it is considerably more that $6,000. Gas where I live is around $2.66 a gallon today. Even at that price, considering what I make today, it's way less expensive than it was back then at .50 per gallon.

That's what I was saying earlier - we all see old prices and they seem stupidly cheap, but we have to remember that back when people were paying $2 for a new hat, they were probably earning $20 a week.

It's not the number on the price tag that's important, it's the percentage of income. If you make $20 a week, $2 is 10% of your income. Now, if you make $200 a week, $20 is 10% of your income. If you make $2000 a week, $200 is 10% of your income.

So the real cost of many things is cheaper than it was back when prices were low. I'd rather pay 10% of my weekly income for a new hat than pay 20% of my income, no matter what the particular numbers happen to be.

I think the issue here is that people want to pay 1950s prices while having 2010 incomes; you can't have it both ways.

 

[Big Man]

... I think the issue here is that people want to pay 1950s prices while having 2010 incomes; you can't have it both ways.

Ain't it the awful truth ...

 

[Vintage lover]

I think the issue here is that people want to pay 1950s prices while having 2010 incomes; you can't have it both ways.

I wouldn't exactly say that. In Israel, isn't gasoline only two cents a gallon? Maybe it is because the oil fields are just next door though. This might be a bit off topic, but I wouldn't mind having gas station attendants that check your fluids and tire pressure again. I hear that they are legally required in some states, but not here in NM. Imagine that, 50 cent gasoline and attendants to boot.

 

[LizzieMaine]

I remember like it was yesterday when our family was on vacation one summer. Gas just about everywhere then was around .35 a gallon. We stopped at an Esso station ("Esso", that's how long ago it was) just outside of Wilmington, NC to get gas. The attendant was just about to put the hose in the tank when my Dad noticed the price of gas at that station was .50 a gallon. He stopped the man and said, "I'll be damned if I'll ever pay .50 for a gallon of gas!

I was keeping books at our family's Texaco station when gas first broke a dollar a gallon -- and for several months we were unable to sell fuel by the full gallon because the mechanical computers on the pumps were unable to go above 99.9 cents. We had to sell all fuel by the *half gallon* until new pump heads could be installed -- we'd set the price at 51 or 52 or 60 cents and had a sticker covering the front of the dial that said PRICE PER HALF GALLON. The attendant then had to double the "This Sale" figures to get the actual price of each sale -- if the pump read $5.00, the customer was charged $10. The confusion just made angry customers angrier.

No one ever ever ever expected gas to go over a dollar. It was as inconceivable to those of us at the time as the Berlin Wall falling, the Soviet Union going out of business, or the Red Sox winning the World Series.

 

[Stearmen]

Rthel Sir?

"Fill it up sir, Ethel, check your oil sir, that'll be quarter sir!" Of course I was on my motorcycle! Some times with a big smile they would say, "wash your windows sir?"