Gas Prices Underinflated?

Viewed daily or weekly from down here at the pump it seems as if gas prices are out of control. There's considerable skepticism about what is really happening, and no lack of suspicion that somewhere dark motives are at work.
From the longer view, it looks somewhat different. Today's headlines may trumpet record prices, but in fact in inflation adjusted dollars, we're still well below the real record. That was back in 1981 after the political turmoil in Iran. In 2004 dollars we were paying a national average of $2.89 cents.
In fact, University of Nevada economist Dr. Jeanne Wendel says over the years gas prices have risen just about at the rate of inflation. We feel it more now she says for 2 reasons. First, the increases have followed years of relatively flat gas prices.
But for the time we're stuck with those gas guzzlers and sprawling communities with long commutes that defy attempts to serve with public transportation. Wendel says we will adjust in time as we need to. She points to Europe where gas prices, and the taxes contained therein have been much higher for a long, long time. Different communities, more efficient cars, more public transportation. Our solutions may be different and may take a little longer. For the moment we're still complaining, but paying.


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