Friday, April 13, 2012
Going Crazy Over Gas Prices
One of my early assignments as a young reporter was the gasoline beat. A year after I went to work for the newspaper, prices began rising dramatically owing to the 1973 Arab oil embargo, and in early 1974 there were a few weeks when supplies became so scarce people were lining up to fill their tanks. There was widespread fear that gas prices could go up to a dollar a gallon. Those were the days.
It’s been more than 30 years since we had to wait in line to buy gas, and today’s higher prices, adjusted for inflation, are not much more than we paid 40 years ago. But gasoline prices still exert a powerful, and utterly irrational hold on the American imagination.
To put it another way, people are crazy when it comes to matters that affect their ability to drive. They take the worst traffic experience they’ve ever had on a stretch of road and turn it, in their minds, into the commonplace. They cancel a two thousand dollar driving vacation because the increase in gas prices would have driven up the cost by thirty dollars. They are susceptible to paranoid conspiracy theories about how gas would be a dollar a gallon if the oil companies weren’t manipulating the prices.
And I am being charitable here. If you look at the things people believe about traffic and gas prices, you would be hard pressed to argue that man is a rational animal.
The delusionary behavior begins with things that are matters of demonstrable fact. I actually keep records of such things and can vouch for the fact that the price of gas at the station closest to my home on March 30 was slightly less than 8 percent higher than a year ago. Yet I’ve seen several quotes from news stories and several letters to the editor claiming that prices have doubled in the last year. How does 8 percent go to 100 percent in someone’s mind? I don’t get it.
Another thing I’ve learned over the years is that the price of gas is volatile. What goes up comes down, and vice versa, always settling, in the end, somewhere around the inflation-adjusted mean.
A particularly dramatic instance occurred in 2008. That summer the price of gas reached the highest point yet, topping $4.60 a gallon where we live. By December of that same year, thanks to the economic collapse, the price briefly dipped under two dollars a gallon before reverting to a more normal three dollars-plus the following spring and summer. The oil-company-conspiracy theorists were noticeably quiet during that period.
Politicians are quick to use rising gas prices against incumbents, particularly the sitting president. It’s a mug’s game for two reasons. The first is that presidents and their policies have next to nothing to do with gas prices, though no one should expect reality to enter into political argument. More importantly, as 2008 taught anyone who was paying attention, gas prices are so fluid that basing a campaign on them is a high-risk proposition. What looks like a good line of attack in March could look beyond stupid in October.
Last month Linda and I took a short drive vacation for our wedding anniversary, about 700 miles round-trip. The higher cost of gas, compared to last year, drove up the expense by less than the cost of two lattes at the Headlands Coffee House in Fort Bragg on a rainy Thursday afternoon. And you know what: I wasted about as much time worrying about the price of gas as I did about the price of a latte.