Winter Break WK #3: “Cost of gasoline has gone a long way”
Adjusted for inflation, it’s at lowest since ’57
Call it the “Whopper Index.”
During Whopper Wednesdays at the Burger King on Argonne Road, customers can get a burger for $1.69.
But the real bargain is at the Holiday station across the street, where gasoline now costs less than a Whopper – any day of the week.
In fact, sitting at $1.49 a gallon for a couple of weeks – a price that can be beat at some stations in Spokane and all over Coeur d’Alene – gas is cheaper than a lot of things: lattes, milk, bread, fishing worms, Sunday newspapers, a Senate seat in Illinois, a new stadium for the Huskies.
This scenario, it turns out, was months in the making. It may be helpful to review what was happening in July.
To set the stage: Sen. Phil Gramm was dismissing economic concerns as a mere “mental recession,” and no one was using the word “bailout” in the same sentence with “General Motors.” The economy was just beginning to eclipse the Iraq war as a campaign issue.
And about the time people were deciding where to spend July Fourth, gasoline topped $4 a gallon (it would eventually hit a national average of $4.11). Sens. John McCain and Hillary Rodham Clinton agreed that it was time for a “holiday” from the federal gas tax so Americans could spend that 18.4 cents on other necessities.
Five months later, we know the recession is more than a state of mind. Unemployment has soared. People are trying to remember what their grandparents said about surviving the Great Depression. State governments face layoffs, tuition increases and reductions in services.
But lose those long faces, because gas is down to a national average of $1.56 a gallon. That’s the lowest price since February 2004, according to the federal Energy Information Administration, whose graph charting gas prices is shaped a lot like the Matterhorn. Based on data going back to 1990, prices have never fallen so rapidly.
Adjusted for inflation, gas is cheaper than it was in 1957, when it sold for 30 cents at the pump (the equivalent of $2.27 today). Then, as now, it was cheaper than a Whopper, which was introduced that year at 37 cents.
In 1957, a motorist could buy 3.33 gallons of gasoline for the federal minimum wage of $1. Today, a minimum-wage worker could buy 4.2 gallons on an hour’s salary.
Of course, such bargains don’t mean much if you don’t get a paycheck, like the 6.7 percent of Americans who are out of work. That’s more than twice the unemployment rate of 1957.
“I couldn’t go on vacation last summer because of the high cost of gas,” said Jerry Whitehead, 64, who was at the Holiday recently, filling up his Ford Ranger. “Now that it’s low, jobs are going away and you’re afraid to leave.”
The question is how long the gas-station limbo will last. The CEO of Gulf Oil told reporters this month that he wouldn’t be surprised to see gas under a buck early next year. If that happens, it will be the first time since the Clinton administration (March 1999, to be precise).
But it’s probably wise to remember what the “experts” were saying in July. Whitehead hasn’t forgotten.
“They were saying we’d be paying $7, $8 by now,” he recalled.
One thing’s clear from looking at the Energy Information Administration Web site: Gas won’t stay low. Sometimes it takes a few years, but since at least 1990, whenever the cost of filling up has gone down, it’s always climbed to a new record high.
Kind of like when Burger King dropped the price of a Whopper to 99 cents in 2003. Pretty soon it was back to $2.39, except on Whopper Wednesdays.
The author of this article was very creative when figuring out how to compare gas prices to other things. The price of a Whopper wouldn’t have ever even crossed my mind. It is amazing to me that the price of gas has dropped so much lately. Seeing as there is so much snow outside, I haven’t really been out of the house for most of the break, making me oblivious to the fact that the price dropped at all. Nevertheless, I find the price of a Whopper to be way too much, especially if it costs more money than gas. It seems unnecessary. No wonder you hardly ever see anyone in Burger King. However, it was kind of funny that so many of the statistics for both gas and Whoppers were so similar.
Anyhow, I agree with the article where it says that we shouldn’t take this for granted because the price of gas will likely go way up again soon, possibly to another record high. It is kind of scary to think that the price of gas could go higher than it previously was, but at least it hasn’t yet hit $7 or $8 like it was predicted to… knock on wood. We can only hope that that never happens.
Connection: This article connects to our discussions about the recession. It covered the bailout plans and the loss of jobs. Now that gas is so low, many people can’t even afford it, seeing as they no longer have an income. Although we have discussed in class that it is basically impossible to see if we are in a recession yet, it seems that it is becoming more apparent that we are. I’m pretty sure that it is because so many people heard recession and made it become so.
First of all, I was surprised that when the whopper was introduced, it was seven cents more expensive than gasoline. I wonder what kind of dilemmas that caused…Anyway, “the question is how long the gas-station limbo will last. The CEO of Gulf Oil told reporters this month that he wouldn’t be surprised to see gas under a buck early next year.” I think that would probably be a rather nice surprise at first glance. But, what would that mean in the grand scheme of things? What caused that drop probably equates to a lot more than gas prices given that the whopper seems to give some kind of insight on the connection between the price of gas and the price of other commodities. “Sometimes it takes a few years, but since at least 1990, whenever the cost of filling up has gone down, it’s always climbed to a new record high.” Ouch. I do not like the idea of going passed our current record, but that quote also means that the prices are years in the making. We should probably keep our eyes on Burger King. “Kind of like when Burger King dropped the price of a Whopper to 99 cents in 2003. Pretty soon it was back to $2.39, except on Whopper Wednesdays.”
Connection: This article states that the economy replaced Iraq as the central point of focus in the election. Gas prices become part of the policy agenda. It soon attracted serious attention of public officials and the American people.
When reading this article the author brought up a valid observation that gas is now cheaper than milk, a whopper, a coffee, and a newspaper. At least by the gallon it is anyways. I was surprised at this news since I do not drive and I also live in the wilderness. So unless someone is complaining, I am oblivious to the cost of gas. But since gas prices have gone, people have not had to make as many sacrifices. As the article pointed out, during high gas prices people had to sacrifice a vacation and for others, different sacrifices. It’s known that Americans really have not had to make extreme sacrifices since our last war and even though we have a war going on and a damaged economy, sacrifices are minimal. And with the low gas prices, one of the only sacrifices has ended.
Connection: As Mr. Kautzman pointed out in class, most of the time gas prices will raise in the winter because we need to heat our buildings. So far we have not seen the affects of this and gas prices isn’t as prominent on the policy agenda as it was when gas prices were over four dollars.
This article is very point blank; it states the obvious facts that most Americans already know about gas prices going down and unemployment going up. The author fails to make any claims or input of opinion as to WHY these things are occurring. The author could have made many claims for why these events are happening-he could have put the blame on the new plans by Obama, he could have been an avid supporter of McCain and believes that he would do a better job, or he could put the blame on the recession, the most popular of the causes. But the author didn’t make any of those assessments or claims, he purely stated the obvious. He could have explained that because the recession was largely on a global scale that the demand for supply of crude oil went down (since nobody could afford it), then, thus, the prices dramatically dropped. As for employment, they could have tried to explain why so many employers need to make their budget cuts. Obviously, on reason, is because they just don’t have the money and can’t afford to pay their workers. But what else? I will admit that I don’t fully understand what EXACTLY these employers need more of in order to keep their workers. And further, what seems to make no sense to me is that corporate-heads are firing their executives and managers- in other words, all of their experience. How do they plan to make any money at all if they are running a facility purely made of entry level jobs and with employees who have little power by their job title to make any authoritative decisions? That’s not going to keep the business afloat! If anyone is still doing their posts and can explain that to me, that would be great, because this article merely skimmed the surface of these topics and didn’t tell me the things that I truly want to know about the gas and employment.
Connection: Supply and demand.
This article largely reflects the desperate need for demand of oil and whatever necessary tools are needed to boost employment. But, because the recession is reaching new heights and money is scarce, the “supply” factor of this concept has definitely come up short. While gas prices have finally decreased, a huge victory, unemployment is causing many new problems and is still preventing people from buying their gas. As a matter of opinion, im pretty sure the biggest demand to be met right now is more money. Money fixes everything. The question of the matter, however, is where will that money come from, how much hardship will it take, and when will that money finally be supplied?
It’s good to know that gas prices have now fallen under the cost of the average fast food burger. What’s even more incredible in my mind is that idea that experts thought gas prices would be around $7 or $8 by now! It’s a pity, however, to remember that “…whenever the cost of filling up has gone down, it’s always climbed to a new record high” (Dan Hansen). I’m usually very optimistic about these things (probably because I drive to and from school each day, and that’s about it), but I don’t expect these low prices to linger. Maybe they will increase steadily for a while, but hopefully we won’t have to deal with the crazy gas prices we had in the summer, sitting around $4 a gallon. I don’t expect them to rise for a couple months though, since because winter means less driving by most people. Right now, most of my friends and family are operating on the “if it’s not necessary, stay home” level. Just as soon as the snow starts clearing for good, it’s back to the whole idea of supply and demand. It will be interesting to see exactly how Obama approaches this issue since many voters are counting on him to fulfill his duty as the “economy candidate.”
Connection: Overwhelmingly POSITIVE public reaction. It may seem like people pay attention to the news strictly when such news is not necessarily good, but since lower gas prices affect all drivers, people are shocked and amazed (in a good way). I think this also relates to the theory about the president’s standing (too much credit for good times and too much blame for bad times). Besides, most people aren’t focusing on Bush’s exit as much as they are anticipating (or possibly dreading) Obama’s arrival.
To be honest, I’m not very educated in economics and why the gasoline prices have dropped so drastically, but all I do know is that at the pump it costs around $20.00 to fill my tank, which use to only get me half of a tank when I first started driving. Most Americans who drive comment that this decrease is amazing, but truthfully, are we setting our selves up for a let down? History shows that whenever there is a decrease, gasoline prices never fail to raise up again to more drastic heights. I believe that lowering gas prices is a great start to help people obtain jobs because how can you get a job if you can’t afford to get there, but what about those who are unable to get jobs or who were recently let go due to the “recession”? I have read “Grapes of Wrath”, and I have learned about the depression in history class. Depression is a scary thought to be seen in a society and America could very well be led to another one. As a nation we need to become less “needy” and dependent on other countries and give up a little to help each other. I’m not saying I’m completely unselfish, I drive a car, I have a nice house, and a good part-time job, but I’m saying that if we all lend a hand then we can prevent a disaster from occurring.
Connection: This article relates to the term “recession”, which is a description of a countries reduction in its Gross Domestic Product for two or more quarters. Basically a period of reduced economic activity. Currently economists say we are in a state of recession and people worry that it could lead to a depression. Many people have already lost their jobs and the prices of goods continues to increase.
This article makes a lot of comparison between the thens and nows of America, but states very few new facts. Yes I know that the gas prices are low; I drive down the Newport Highway and see that. I know unemployment rates are skyrocketing; I watch the national news almost every night on TV. So a gallon of gasoline is less money than a Whopper, yes that is very interesting, but is it going to stay that way? There is a simple answer and it is no. That just isn’t possible; the economy is design to fluctuate up and down. Once the world market is good again OPEC will probably raise the cost of a barrel of oil right along with it. You know what they say about the quiet before the storm. Gas prices are $1.58 this month but by the summer they could be right back up to the $4.50 mark again. With that change maybe the economy will leap out of the recession and all will be well on Wall Street again. Americans want a perfect world: cheap gasoline so they can go on vacation, employment for everyone, perfect president, and low prices of food. Well the fact is that may not be possible. Maybe we can never have unemployment rates be low and low gasoline at the same time; we have one or the other. It may be harsh, but it may also be true.
Connection: This article can be indirectly linked to gross domestic product. Maybe there is a pattern forming: low GDP, low oil prices. While GDP isn’t mentioned in this article, it is however affected by the lower gas prices to some extent.
No doubt about it, gas prices are low right now. These prices a great relief for every driver, especially to us high school students who make either nothing or a low wage (and yes, I guess you even count Mr. Kautzman). I love going to the gas station and paying one-third of what I did about 6 months ago, and the prices are still going down. Many people think that prices will go down under a dollar within the next 6 months or so. That will be a great thing, but will probably mean the economy will be even worse than it is now. Some also say that the economy will actually get worse than the Depression if things continue the way they are (credit is, of course, the best thing to ever happen to America, duh). But all things business go in cycles. Some years are good years and others are bad years. Gas prices go up and down. Right now, we are in a pretty bad year and gas prices are down. It would be very rare for the economy to get better and gas to stay where it’s at or go lower. So what’s more important to those with good job security – cheap gas or a good economy? I hope most Americans are praying for the latter otherwise we’ll never get out of this mess.
Connection: Economic speculation. Most of how the economy goes is dependent upon how the public views it. If they think it’s going to go under, everyone tries to get their own money out. If everyone does this, we’re talking a big recession. That’s exactly what we have.
For starters, I think this article really shows how pathetic our country is, we are basing all of these assumptions and projections around fast food and gas. I think that it is a really poor indicator of our country’s priorities but it is a language that anyone and everyone reading this article can understand. The cost of gas is something that everyone can relate to, no matter where you live, Washington, Florida, Nebraska, everywhere you go people are paying for gas and having the same problems whether it is not being able to afford gas or whatever it may be, so writing this article the way they did makes sense. Paying for gas myself I’m glad that the projections weren’t accurate and gas isn’t at $7-$8 but at the same time I would hate to see that that they aren’t right again and gas is going to go back up because wages won’t go up at a rate even remotely close to the rate gas prices rise, or have risen in the past few years, and the cost of living won’t go down, if anything it would rise as well because food prices as well as prices of everything else from clothing to timber would rise because the cost of transporting the goods from the manufacturers to the stores would increase because of gas.
Connection:
Speculation: people are going to believe what they hear so if they are told that gas prices are going to skyrocket again then they are more likely to return to the mind set they were in prior to the decline in gas prices and if the media tells people that they will plummet again then people may be more likely to be less frugal and not save as much money because they think that there will be more money for them to spend on other things.
Yeah sure we are very happy to be paying $1.50 but I think that shows the instability of the economy when we go from paying four dollars plus a gallon to $1.50 in 6 months. With the economy crashing all around prices needed to drop or else everyone’s paycheck would be going into their gas tanks like it did during this summer and more people would be on unemployment and welfare than now. During the summer I saw people at the gas stations filling up their Hummer’s and Ford Excursions and then cursing at the pump because they had to put their credit card into the machine multiple times because the pump had a $100 limit on it.
It is crazy that if the US dollar did not inflate between the 1950s and today everyday items would be the same price but yet even though we are paying the same amount for things unemployment is over double what it was then. Hopefully with the new bailouts going in play things will turn around and we could have cheap gas and lower unemployment. It is all good when gas is cheap but I would much rather have seen college tuition drop this fast.
Connection: The economy runs on emotion and if people are freaking out about losing money and stuff prices will drop because if no one can afford it why buy it? It doesn’t help with everyone speculating that a depression could happen that was worse than the one in the 1930s.
I would have to say that right now it is great that gas is now cheaper than a Whopper and cheaper than it has been in a long time. Especially with the recession, lower gas prices make it so that America’s population has one less thing to worry about. However I think that now that gas is lower, people cannot go all haywire and go back to their normal driving routines. When gas was around 4 dollars a gallon, it caused people to think about where they were going to drive, if they could carpool, or catch the bus. Not only did this help with the amount of money the spent, but also this kind of “green” thinking was good for the environment. Now that gas is around 1.50 a gallon, people may not think about alternative ways of getting where they need to go. People may be thinking that they are spending less money at the pump, which is true, but in order to really reap the benefits of these lower prices they need to continue being smart travelers. Although I would have to say that at least gas isn’t 7 or 8 dollars a gallon, otherwise America would be having major problems.
Connection:
This relates to the discussion we had in class about how usually after the summer, gas prices lower because not so many people are traveling. We did see this reduced pricing after summer, but nobody expected it to last this long.
Mmmmm… Whoppers. I think I’m going to have to go buy one now. But then again, I just finished shoveling the snow off the roof and am starving out of my mind…
Well according to the article, we are coming along the lines as it was in 1957, when gas was merely 33 cents a gallon and a Whopper was 37 cents. Well, 50 years later, we have gone up with inflation so much, that the $1.57 gas that is current is cheaper than the 33 cent average back in the day. That goes to show you how much our nation has been affected by inflation. This is also another sign of a depression, but is understandable, considering the immense stretch of time. The article did a comparison of the minimum wages from then and now, which also show how drastically inflation has risen, which is also the tool to measure the ratio of gas prices today and in 1957.
Connection: Washington now has the highest minimum wage in the entire country, at an enormous $8.55 per hour, 8.55 times greater than it was 50 years ago. This goes to show how much inflation has risen over the past years, and also allows for a scale to show the cost of gas in comparison with 2008/2009 and 1957.
Well I’m not complaining about the price of gas. Then again, I have a job so I can afford paying for 4.2 gallons of gas for just one hour of work. Personally I am way for gun-ho about getting a gallon of gas compared to buying things like milk and Whoppers. This all seems a bit beside the point, it’s ironic that we are making assumptions about our economy based on the price of food and gasoline. But then again, I guess it does make a big difference if people are buying these small ticket items. The so-called “experts” of the economy are kind of like the weather people, they are completely right rarely, often wrong, and sometimes get lucky. No one really knows if the price of gasoline is going to be “under a buck early next year,” or if we will be “paying $7, $8.” Economy is a risky business and it can really go either way, but as has been repeated in history our country bounces back from recessions wonderfully and usually goes into recession after and economic boom. With our unemployment rate up we do have some things to worry about, but frankly I haven’t gone to my grandfather and asked him how he survived the Great Depression because that is the attitude that puts a nation into another Great Depression.
Connection:
We have talked about prices being custom to change due to inflation. I personally have not compared today’s prices with past prices because I never really thought about how if you compare inflation with all these prices to the last few decades thins really aren’t that much different. Like I stated earlier our unemployment is something we definitely need help with but looking at the past I think our future should be just fine.
In response to Johanna:
First off, I am in basically the same situation as you, although I don’t live in the wilderness, until I read this article I was oblivious to the fact that gas had gone down. For me, it was just because of the snow and my lack of a car. Although I see where you are coming from, I still have to wonder about something. Now that gas has gone down people don’t have to make sacrifices for it, but they still need to make sacrifices for other things, like a Whopper, for instance. Food prices (as least fast food) seem to be rising to outrageous amounts lately, and since the price of gas is now cheaper than that, it seems even more expensive, seeing as we still think of gas as one of the most expensive things around lately. As someone who lives in a family who eats out more than any family should, it will be a sacrifice for us to pay that much for it, seeing as that would make us give up the chance to buy something different, but giving up fast food altogether because of the price would be just as hard. Although it isn’t so bad that we wouldn’t be able to take a vacation because of it, it is still a sacrifice.
Hooray the energy crisis is solved! Who would have thought that the only thing we needed to do was deny an economic recession for so long that it spiraled out of control. I would encourage people not to buy any consumer goods; it will certainly keep gas prices low. Think about it, if trucks and planes don’t need to ship consumer goods then less fuel will be used and prices will drop, it’s a no brainer. Obviously this is bad news bears. I always hear students saying how they excited they are for low gas prices and that they can finally afford to go drive again, and everything is just swell and dandy. Unfortunately they are wrong. Everything is not swell and dandy, because people are losing jobs, so less money is being spent on consumer goods its stagflation, bolded, underlined, and italicized (oh yeah that’s my connection sorry for sticking it in the middle). Now I’m no economic whiz, but it seems like things are still getting worse and not better, in which case it would seem like we are heading for a depression. I can tell the people who wanted to know how their grandparents survived the depression the author mentions how they survived. They joined in World War 2. Think about it, if we start a world war now we can bypass all the starving and suffering of another depression.
Well, this article is very clever in how it presents its facts. Comparing the price of gas to fast food is a good way to make a connection with the public. That gas is at its lowest since 1957 is incredible. For the first time since Eisenhower was president, we have had gas this low (If this gets out of hand, though, the public may start to demanded gas prices in terms of Whoppers). However, while the author gets his point across about gas prices, he doesn’t talk about the reasons other than the obvious one of the recession; nor other consequences of gas prices falling in terms of what is being talked about (other than its influence on the election). Gas prices traditionally go up higher during winter, because we need it for heating. That was why the experts predicted we would be paying a lot more than $4 for gas. But this winter, they went down considerably. The recession caused this, because it spread from the U.S. and other industrial nations into the oil producing countries. Those countries run off of oil money and can’t afford to cut production. So because of the recession, supply has increased while demand has remained the same. Another thing, more serious if you ask me, is that there is no more talk about going more fuel efficient or more environmentally friendly in what we do. Because we aren’t paying through the nose to get gas, people have stopped worrying about going more fuel efficient, and that is bad. Just like Mr. Kautzman said about a month ago, that if we can get gas cheap, America won’t cure its addiction to oil.
Connection: Supply and demand. This global recession has caused gas prices to drop because it has increased supply while demand has not increased with it, and causing the prices to go down. As a result, a Whopper is more expensive that a gallon of gas.
“One thing’s clear from looking at the Energy Information Administration Web site: Gas won’t stay low. Sometimes it takes a few years, but since at least 1990, whenever the cost of filling up has gone down, it’s always climbed to a new record high.”
Duh, you flaming idiot. Fossil fuels are nonrenewable resources. As demand increases, and supply decreases, prices rise. Dan Hansen, that is called supply and demand, which falls into the category of basic (no duh) economics. Since the days of gasoline will, one day, come to end, why don’t we invest our time and money into more efficient, clean, energy sources? I understand that, as of right now, alternate energy sources seem counterproductive because gas is SO cheap; however, gasoline’s cheap nature will become painfully clear as the earth’s temperature rises, as tension between oil providing nations rise, and as the prices upon our local billboards continue to rise. But in some respects, I do agree with Dan Hansen, gasoline has come a long way. When Americans first started using, gasoline was fun and took us away to new and exciting territory. Now, we are addicted to the harmful substance, and dependent upon its “benefits”. So yes, the process of gasoline usage is somewhat evolutionary, however, what we are evolving into is far from attractive, and not the least bit productive.
One last thought: What do the whopper sandwich, gasoline, and American culture all have in common? They are all cheap, and can easily be substituted with something healthier.
Connection: Supply and demand economics. (Explained throughout post)
“Gas won’t stay low. Sometimes it takes a few years, but since at least 1990, whenever the cost of filling up has gone down, it’s always climbed to a new record high.” I sure hope that the price of gas doesn’t go back up any time soon. It won’t go up before Obama comes into town, so I sure hope that he plans to and will keep it down to a moderate amount. Maybe not as low as it is right now, but at least not back up to three dollars. Two dollars is ok for me. I think that it is good that “gas is cheaper than a lot of things: lattes, milk, bread, fishing worms, Sunday newspapers, a Senate seat in Illinois, a new stadium for the Huskies.” Gas is needed to go get the milk and bread from the store or build a new stadium for the Huskies. It is needed to deliver the bread to the store so that it is there when I get there. When gas prices go back up to ridiculous prices, so will everything else. The cheaper the price of gas is, the cheaper everything else will be. Although with the minimum wage increasing at the rate it is, I guess gas won’t be too hard to pay for, but the price of everything else, such as food, is not going to go down like it should.
Connection: I might be pushing it, but can the minimum wage increase be similar to a free-rider problem? If the minimum wage keeps increasing like it is, at $8.55, then people will not find the need to find better jobs, they will just stay at the easy jobs like McDonald’s because at a pay percentage they are getting payed better then the people that have better jobs. Everytime that the minimum wage goes up, the managers and bosses don’t get paid more, just the people on minimum wage.
No matter how much people talk about inflation and stuff, I still do not understand it. I know it has to do with buying things and supplying things, but I just don’t get it! But anyway, with these gas prices going down, everyone is ecstatic. Being only seventeen, it blows my mind to think that I was able to afford filling up my little 12 gallon tank for $40 about every two weeks, with my hard earned money! It makes me proud, and leads me to think that the raise in gas prices made our country more aware of our money. Now with the gas prices falling drastically, will our country go crazy with their money, or because of the struggling economy, spend it wisely?
Oh, I hate money and the economy. It is too complex.
CONNECTION: With this new year of 2009, Washington’s minimum wage went up. With minimum wage rising, it makes me wonder if other prices will go up too. Also, this article connects to the discussion we had a long time ago about how during the summer gas prices always go up, but then fall after the summer. Gas prices certainly did fall! And maybe a little too fast. It is possible that we will have a raise just as fast as we had the fall. (But I really hope not)
Gas price seems to just be a very unpredictable field right now. As was mentioned in the article, last summer gas was extremely expensive. I remember paying sixty dollars to fill up the tank of the car every week, which is pretty much impossible when you are working at a minimum wage job as a teenager and you only get eight to twelve hours per week. And I remember everyone saying that the prices were only going to get worse. There was no mention of prices getting lower, they were supposed to only get higher and higher. And now, prices just keep getting lower and lower, and although it is much more affordable, it’s hard to pay for the dollar fifty gas if you don’t have a job. It’s hard enough to get hired today if you are under eighteen, and now with the recession going on I am sure that it is going to become nearly impossible. I have also found it interesting hearing some of the theories from adults about why the gas prices have fallen. I have heard that “they” lowered the prices just for the election, and that as soon as Obama is sworn into office they will go back up. But that makes no sense because the prices started dropping before anyone knew who was going to win the election, so fixing the prices wouldn’t really give any individual an advantage over anyone else. Another theory I have heard is that the prices are dropping because there were so many people who quit driving when the prices were really high that the gas companies had to lower them otherwise no one would ever buy gas again, but I don’t really think that is true either. I think that it is just one of the many snowball effects of the declining economy rather than some strange government conspiracy to steal our money. Connection: During the election project that we did, I found on John McCain’s website something saying that one of the things that he wanted to do was to create a national gas holiday, where every year gas prices would be lowered by some specific amount from Memorial Day to Labor Day to lessen the burden of gas costs on families in the summer time. This was a good plan when gas was four dollars a gallon, but now if that went on the gas companies might have to start paying us to use their gas.
This gas fall is obviously coming to a halt. I don’t think that the government would even let it get much lower. I mean it’s not like it will get to the point that gas stations are paying us to take the gas. That would be absurd. We the people cannot let that happen. Well I guess we would not be that opposed to it. The fact that gas has dropped so much and at such a rapid pace, is kind of a scary thought. Even though the article said that the changes started in July, it seems like it has just dropped too fast to not have any consequences. Back in July no one wanted to buy gas because of the cost, so the price went down. But now everyone wants as much as they can while it lasts because it is so cheap, but could not that lead to a huge increase in the price? Now that gas is being bought as often as possible, there may be a “shortage” again and the prices could start to rise once more. Gas has come back down close to an all time low; I think that the gas tax can come back since it is kind of too low. And who pays $1.49 a gallon? It’s like $1.40 at Costco!
Connection: Supply and Demand. During the past few years as gas slowly rose, people became worried but still bought the gas. During the summer when the price reached an all time high, people decided to put a stop to it. The price was so high; people didn’t want it any more so the price went down because the demand went down. Now the worry is that the price is so low and demand is so high, the price will rise once again.
Oh great. Now I’m worried. I do hope that the cost of gas won’t spike like the article, and history, says will happen. At least not until I own a car that runs on something renewable, like the national debt or something.
It’s cool though that the article could take something like gas and inflation and relate it to something simple, like food, so that one as slow as I could understand what’s kind of going on. So, the way I understand it gas is at a great price, even better than that of 1957 because we can get a gallon cheaper than we can get a sandwich at some fast food place. That’s good. Gas is better than food I guess. Even with inflation though it seems that we’ve been lucky. Way back in 1957 I could only get three gallons or so on minimum wage. Now I can get four. And that’s not even counting Washington state, which has the highest minimum wage, where I can get almost five gallons. Needless to say my car has gone without wont for quite awhile now.
The only thing that nags at the back of my mind is the prediction that gas prices will reach record highs in the near future. Oh man. Perhaps the gods of life are just waiting for all the foolish little Americans to buy lots of SUVs and trucks and completely forsake all things hybrid. Then they’ll snap their fingers and cripple the nation with outstanding prices. That would be their idea of some humor, while all of the US is moaning and wailing and emptying their pocket books in order to feed their preventable addictions to gas guzzlers. Poor us.
It seems that the world’s great superpower has a weakness after all.
Connection: I remember that Kautzman talked about the sharp decline in gas prices and said that it was already lower than when president Bush took office. He asked the question if that made him one of our better presidents, or something like that, and the people in our class answered with a resounding “no”, pointing out that over four dollars a gallon wasn’t very nice. I was also watching the news the other night and one of the people mentioned that America did have a weakness: our credit and debt. I linked that with the gas prices because we can almost no longer afford to fuel our boats and motor homes because no one will give loans anymore.
P.S. I still don’t see what’s wrong with earning a little money on the side. People in Illinois seem to be making a bigger deal out of this than there needs to be. Jeez.
This article started with a very interesting comparison. “The real bargain is at the Holiday station across the street, where gasoline now costs less than a Whopper – any day of the week.” How does comparing the cost of gas to the price of a whopper help anything? Although I must say I’m very happy with the gas prices currently. It isn’t costing an arm and a leg for me to fill up my car anymore. I find it interesting that currently gas costs less then it did in 1957. This year doesn’t sound like anything special to me but gas was cheaper then a whopper. And the unemployment rate was two times smaller then our current rate.
It is amazing that just last July experts were saying that we would be up to $8 dollars a gallon by now. Instead the prices went down and now the national average is sitting at $1.56. However, “Gas won’t stay low. Sometimes it takes a few years, but since at least 1990, whenever the cost of filling up has gone down, it’s always climbed to a new record high.” This isn’t a good thing but I think that as the economy gets better gas prices will get higher. It will be interesting to see if gas prices continue to fall or if they steadily start to rise again. Personally I hope they stay low.
Connection: I can connect this article to the recession we are currently in. Because the economy is bad gas companies have found the need to cut prices in order to continue making more money then they are spending. But that also means that their employees suffer as well. It will be interesting to see how gas companies handle this recession.
This was an interesting read, and now I am also wondering “how long the gas-station limbo will last.” In the article it was also stated that if “adjusted for inflation, gas is cheaper than it was in 1957, when it sold for 30 cents at the pump (the equivalent of $2.27 today)”. It is working out great for me, and I’m sure many others, because it leaves more of the cash earned to be spent on other things than gas, but it can’t last forever. Just like the price of the whopper dropping to 99 cents in 2003 and then jumping back up to $2.39 soon after, the gas price is sure to rise back to a $4 average or more since prices always climbed to a new record high after a drop like this past 1990. The author made another good point in that these prices “don’t mean much if you don’t get a paycheck, like the 6.7 percent of Americans who are out of work.” The author doesn’t go into what he thinks is the cause of this increasing unemployment, which I am still not clear on, but it is affecting people making them more fearful of the security of their jobs. “I couldn’t go on vacation last summer because of the high cost of gas,” said Jerry Whitehead, 64 “Now that it’s low, jobs are going away and you’re afraid to leave.”
Connection: This article is related to the economy. It shows how right now the economy is fluctuating in different areas; the gas prices were at an all time high and now they have reduced, meanwhile the unemployment rate is increasing.
In response to Savannah Hunka:
You bring up a great point about these conveniently low gas prices: “Most Americans who drive comment that this decrease is amazing, but truthfully, are we setting our selves up for a let down?” (Savannah Hunka). A let-down seems almost inevitable at this point considering past trends in gasoline prices. Even though I haven’t driven my car all break, it also only cost me around $20 last time I filled up. I also agree that lowering gas prices will help people find jobs if transportation is the main issue, but this can’t continue for much longer, and chances are it probably won’t. Having a part-time job is great because I don’t have to rely on my parents for gas money, but the next step for most of us is college, which will cost much more than we’ve probably ever personally paid for gas. All in all, these low gas prices are great for the time being, but as soon as prices begin to climb again (probably closer to when the snow melts), panic will settle in just as it always does.
In response to Jordan Yaeger:
That is crazy that people were pouring so much money into their gas tanks like you saw this summer. I think that it is horrible that the citizens of the United States are required to do that, but, that is how democracy works – the old-school laws of supply and demand. I believe, that, like most things, we ought to just not have any, or at least very little, government interference. Prices will even themselves out, and there would be a lot less inflation if the government helped the people less.
As you stated about unemployment, I agree with you that gas has had an impact on these rates. I mean, at $4 a gallon, gas was a killer to fill up. I hate to see people trying to struggle just to make it through the day, and I’m sure, like I said before, they were impacted by gas. But what is even worse, is that to have a good career today and be making a decent amount of money, one must go to college. But college is so damn expensive that people are required to just focus on living their current day’s lifestyle instead of trying to do better by educating themselves. And I believe that a lot of this comes from the prices of the necessities in life, such as gasoline.
I also noticed that so many people posted on this article and find it rather humorous, because it is true that our nation has a filter to hear what they want to hear, as shown through this article. It affects the student body, and therefore, people want to know about it.
In response to Malaika,
Your satire rocks my world…if your post is indeed satirical.
If not, I’m really concerned, and I suggest this to you:
http://www.ted.com/index.php/talks/john_francis_walks_the_earth.html
Watch this, and suddenly EVERYTHING will make sense.
In response to Tommy,
I agree with you about the fact that no one can be certain about the future of the cost of gas. I like your way of putting it as that economists are just weather people who can never get the right answers. I for one am skeptical about the “below a dollar” very soon. The price can only drop so low before it has to go back up. It has dropped so much that it seems like it has to rise back again. Personally, I would feel safer about the future of the price of gas if it was back up around $2.30 a gallon. That seems like a good price because it is not really low that people could freak out about some conspiracy and it is not way, way high that people are just going to sit there and complain about it. One thing that I saw in your post is that you didn’t really care about the price of gas being cheaper than that of food because you have a job. I think you might have a different opinion on that if you had to buy all of your own food with just the money that you made from your job.
In response to Kathrine Kruse:
Inflation is basically paying more for everything. There are so many factors that play into inflation. Like greed, natural resources, unions (or minimum wage), and supply and demand.
Minimum wage; it seems to be a temporary fix to the average person’s problems. With the rise of minimum wage, the cost of making/supplying any good or service will increase, as so will the price. Then we will be paying more, and more, and more for everything. And then, minimum wage will rise again. “It’s the business giants and the government officials who make all the real money. We have whatever they kick down to us” (Immortal Technique “Poverty of Philosophy”). We live in a plutocracy, a government run by the rich, where inflation is due to the amount of greed that the people who control the “all mighty dollar” have.
And as far as spending money wisely, first, the unemployed have to worry about getting money for survival. “I’m homeless, jobless, times is hard, about hopeless, but I gotta eat regardless, no family to run to I’m 22, now tell me what the *expletive* am I supposed to do” (Dead Prez “Hell Yeah (Pimp the System)”). The majority of America resides in the middle-class, and now they are starting to live on a tighter budget, in which extravagancies are not easily afforded, so the money we save from lowered gas prices have to go to other aspects of survival.
“…we ain’t gettin paid commission, minimum wage, modern day slave conditions, got me flippin’ burgers with no power, can’t even buy one off what I make in an hour, I’m not one to kiss *expletive* for the top position, I take mine off the top like a politician, where I’m from doin’ dirt is a part of livin’, I got mouths to feed dog I gotsa’ get it” (Dead Prez “Hell Yeah (Pimp the System)”).
In response to Nicole:
I completely agree with you. The reason that I did not post on this article initially is because the article seems pointless. It did nothing to shed any light on the mechanisms at work behind the fluctuating oil prices. It is easy to look at the sudden drop in gas prices and become exited. I, myself, was thrilled when I could actually drive somewhere on a few dollars worth of gas. However, we need to pay attention to why this drop occurred, seemingly overnight. The sudden dive in prices, both the price of gas and the price of a Whopper, seems to mirror something much more grim—a plummet in our economy. Does it? That is hard to say. Even as our economy began to head in the wrong direction, prices continued to climb for several months. Even as many began to cut back on driving because of soaring gas prices, the oil companies continued to put their own interests first. I am very interested to know whether it was the really American recession, the international slump, or something entirely different that caused such a dramatic change. The premise of this article was interesting, but the article itself seemed to be nothing but wasted words.
In response to Kathrine Kruse:
Kathrine read some books! I’m just kidding, but the overall picture of the economy is not that hard to understand with some reading on the internet or in some books. Of course, the intricate details of an economy are reserved for learning in a college level course, but the basics are fairly easy to understand. The first thing you must understand is supply and demand. I’m assuming you already know that. The next thing is how the whole economy runs on a domino effect. If one business goes out of business, all the workers lose their jobs, which stops their income, which stops them buying other consumer goods, which puts another business out of business, etc. This keeps going, and not only in the private world but the corporate and investment world also. If a few big things go wrong, it can send the whole economy out of control. Also, realize that just because gas prices are down doesn’t mean our country is doing well. I think you know that, and I’m sure thankful for low gas prices too, but I’d rather pay a couple more dollars a gallon and be able to get a job than pay less at the pump without a job. Not having a job defeats the point of having low gas prices, because I wouldn’t be able to afford any gas no matter the price (unless it was free I guess). And another quick note, a minimum wage increase doesn’t mean you have more money to spend. That’s one of the biggest misconceptions in our society. A minimum wage increase means spending more money at McDonald’s, the movie theatres, etc. because they need more money to pay their “minimum wage” workers. So while your wage goes up, your buying power goes down. Minimum wage is meant to be an incentive to make more money, not a wage you can get cable TV and a new car with. With these basics, go conquer some economic knowledge (granted I don’t know a ton either, just sharing some stuff I do know).