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For years, lower prices were achieved via importing from cheap markets, just as corporate profitability and "stock holder interests" have been held high by laying off people. There comes a point when you can't go further, because people aren't in a position to pay more (the fact that incomes for what makes the consumers declined following the peak in 2000), leads to next logical step: reduced size. Although, that doesn't really apply to milk, because a gallon then is a gallon now. If you're using it as a measure of inflation, and claiming that we're in unprecedented inflationary times (whereas, a depression would actually reverse that) should be reflected in the prices. The question is: Is it?
I think in current dollars, the price of a gallon of milk is pretty much where it has been for last 10 years, if not more. I recall paying a little over $2/gallon in late 90s when I moved to Texas. It is about that, today.
The argument, perhaps, should be that using current price of something like milk and gasoline to make a point on inflation is being out of touch with how things work. I doubt $4.12/gallon for gas prices in June-Aug 2008 was reflection of a period under super inflation.
I agree with much of that....which is why lone commodities are really hard to correctly address as being impacted by inflation unless other factors like supply and demand are held constant. Without a doubt sagging gas demand in the US has helped keep prices in the $3's instead of $4's.
With regards to milk, I spend about $3/gal *typically* but I could get it for $2 at Aldi's but that's a lot more of a drive for me and a separate trip etc etc. I am more pressured on time in my life than money right now so I pay more. if prices rise and I were to be laid off I'd probably be over at Aldi's buying it for $2 like I used to in college.
It's possible that someone can be partially right about what is going on even if their logical support for their thinking might have some holes in it.
Just for fun I pulled some data over the last 25 years. The minimum wage in 1985 was $3.35. It is $7.25 today. That is a 3.0147% increase per year. On a multiplier basis, it works out to 2.1646. M = (1.03147^26). Everything in 1985 can be stated in 2011 dollars by the formula P(1985)*M.
A gallon of gas was $1.29. Adjusted for inflation, it works out to $2.79 today. It's $3.49 in CA, but as low as $2.85 in parts of the country. I couldn't find any quick data on gas taxes, but one link suggested gas taxes are up 150% over the 1980's. Discounting for taxes, the wholesale price of gas is about the same as it was in 1985 dollars. The average car, however, gets 36% better mileage today than 1985, so your minimum wage worker (baseline) actually spends less per mile driven than he did in 1985 adjusting for inflation.
Eggs were $0.80 cents. That is $1.73 in 2011 dollars. No change.
Milk was $2.26 a gallon. That works out to $4.89 in 2011 dollars. It's cheaper than that now.
Median house price for all regions was $100.3k, or $217.1k in 2011 dollars. Median price today is actually $189k for all regions.
The unemployment rate was 7.5% and the population has grown by 60 million people.
I was 30 years old and earning about $35,000 if I remember. I remember the rule was you had to be earning more than your age to be considered successful. If you were 30 you needed to at least earn $30,000.
I was married and owned a house. My wife had a crappy K-car that spent its time in the shop. My Bronco sucked gas like a Ferrari - it got about 10mpg. There was no cell phone service. A Sony Walkman was about $200 dollars and I remember debating about buying one because it was so expensive. My camera used film and I had to take it to get developed. It was about $3 a roll and another $4 for processing. The camera was a huge purchase - in the hundreds. Our TV was about 19 inches and weighed 100 pounds. I don't think we got any kind of cable tv until about 1990. Maybe a little later. Computers were a luxury item. A Macintosh or PC was $2,000 minimum. There was no Google or Bing. I was an early adopter and had an email account through a service that was dial-up. My computer was a Commodore, and it was a joke by today's standards. There was hardly anyone to email. It was mostly message boards. It cost about $15 per month and my wife gave me grief because the phone bill was about the same.
Things aren't great, but not as bad as one might think.
If gas prices keep going up, it will be very bad for the economic recovery that's supposedly occurring.
Just the opposite I would be terrified if gas prices started going down as that would mean a decline in global economic activity and likely herald a recession. As long as you have increasing demand outpacing supply and modest inflation gas can go nowhere, but up.
Is anyone in the nation paying more than the 3.99 for the cheapest grade of gas? That's the price in Hawaii as of now and I was told it's the cheaper areas of the island, not in the touristy locations.
Just for fun I pulled some data over the last 25 years. The minimum wage in 1985 was $3.35. It is $7.25 today. That is a 3.0147% increase per year. On a multiplier basis, it works out to 2.1646. M = (1.03147^26). Everything in 1985 can be stated in 2011 dollars by the formula P(1985)*M.
A gallon of gas was $1.29. Adjusted for inflation, it works out to $2.79 today. It's $3.49 in CA, but as low as $2.85 in parts of the country. I couldn't find any quick data on gas taxes, but one link suggested gas taxes are up 150% over the 1980's. Discounting for taxes, the wholesale price of gas is about the same as it was in 1985 dollars. The average car, however, gets 36% better mileage today than 1985, so your minimum wage worker (baseline) actually spends less per mile driven than he did in 1985 adjusting for inflation.
Eggs were $0.80 cents. That is $1.73 in 2011 dollars. No change.
Milk was $2.26 a gallon. That works out to $4.89 in 2011 dollars. It's cheaper than that now.
Median house price for all regions was $100.3k, or $217.1k in 2011 dollars. Median price today is actually $189k for all regions.
The unemployment rate was 7.5% and the population has grown by 60 million people.
I was 30 years old and earning about $35,000 if I remember. I remember the rule was you had to be earning more than your age to be considered successful. If you were 30 you needed to at least earn $30,000.
I was married and owned a house. My wife had a crappy K-car that spent its time in the shop. My Bronco sucked gas like a Ferrari - it got about 10mpg. There was no cell phone service. A Sony Walkman was about $200 dollars and I remember debating about buying one because it was so expensive. My camera used film and I had to take it to get developed. It was about $3 a roll and another $4 for processing. The camera was a huge purchase - in the hundreds. Our TV was about 19 inches and weighed 100 pounds. I don't think we got any kind of cable tv until about 1990. Maybe a little later. Computers were a luxury item. A Macintosh or PC was $2,000 minimum. There was no Google or Bing. I was an early adopter and had an email account through a service that was dial-up. My computer was a Commodore, and it was a joke by today's standards. There was hardly anyone to email. It was mostly message boards. It cost about $15 per month and my wife gave me grief because the phone bill was about the same.
Things aren't great, but not as bad as one might think.
Great post. Thanks for putting things into some much needed perspective.
All according to plan from Steven Chu and the rest of Obama's ilk.
Nice to have people in-charge who are in touch with realities and the inevitability of higher energy costs. You might prefer someone who "soothes" your beliefs, however, but that works well when the idea is to keep the head stuck in the sand.
Gas Price was $1.83 when Obama took office. Then the he decides to use his administration to slow the growing production rate in order to drive up oil prices to pay back his cronie Wallstreet Banker buddies who bought him the presidency by contributing heavily to his campaign. Yes - Wallstreet Bankers own way more oil & infrastructure than the oil companies do.
Obamas Top Contributors that Bought his Presidency.
University of California $1,648,685
Goldman Sachs $1,013,091
Harvard University $878,164
Microsoft Corp $852,167
Google Inc $814,540
JPMorgan Chase & Co $808,799
Citigroup Inc $736,771
Sidley Austin LLP $600,298
Stanford University $595,716
WilmerHale LLP $550,668
Columbia University $547,852
Skadden, Arps et al $543,539
UBS AG $532,674
IBM Corp $532,372
General Electric $529,855
US Government $513,308
Morgan Stanley $512,232
Latham & Watkins $503,295
February 10, 2009 - Secretary Salazar announces he will delay the Bush Administration 5-year plan for oil and natural gas development on the U.S. Outer Continental Shelf for six months. He begins a “listening tour” in spite of the fact that the Bush Administration had already solicited public opinion on this plan.
September 17, 2009 - Secretary Salazar states that the Administration may not complete a new OCS lease plan until 2012.
September 21, 2009 - The Administration’s extended public comment period on the draft proposed 2010-2015 Outer Continental Shelf plan comes to an end – yet the Administration still makes no announcement regarding the future of offshore drilling.
January 26, 2010 - The Department of the Interior announces it will delay the Virginia offshore lease sale scheduled for November 2011.
January 27, 2010 - President Obama mentions offshore drilling in his State of the Union address – leading many to believe he is open to expanding drilling in the OCS.
February 1, 2010 - President Obama releases his FY 2011 budget proposal that shows revenue from new Outer Continental Shelf (OCS) leasing declining from $1.5 billion in 2009 to only $413 million in 2015. The only way revenue would decline is if less of the OCS is offered for leasing for energy production.
February 4, 2010 - The Wall Street Journal reports that public comments collected by the Department of the Interior ran 2-to-1 in favor of the new 2010-2015 lease plan.
March 3, 2010 - Secretary Salazar confirms that the Administration will not put a new OCS lease plan in place until 2012, which means no new drilling will take place during President Obama’s term in office.
July, 2010 - The date new areas would be available for leasing under the original 2010-2015 lease plan if it were not for the “Obama Moratorium,” which has delayed implementation of a new lease plan until 2012.
December 1, 2010 - Effectively reinstated the ban on offshore drilling, placing the entire Pacific Coast, the entire Atlantic Coast, the Eastern Gulf and parts of Alaska off limits to future energy production until 2017 at the earliest.
November 8, 2011 - Announces a new draft 2012-2017 lease plan that closes the majority of the OCS to new energy production. The draft plan prohibits new offshore drilling and only allows lease sales to occur in areas that are already open. It includes lease sales in the Western Gulf of Mexico and Alaska – leaving portions of the Arctic and the entire Atlantic and Pacific Coasts off-limits to new energy production and job creation.
January 1, 2012 - Our US Government raised our gas taxes nation wide!!!!! Some States also raised gas taxes on their citizens!!!!! Wow, Just WOW! - It is amazing how they just got away with raising taxes on the poor again!!!
Obama is just allowing the Keystone Pipeline to be built from Cushing, Oklahoma to the Gulf of Mexico because Canada's Enbridge outsmarted him buy buying up ConocoPhillip's stake in the Seaway Pipeline. Enbridge is turning around all the pumps along the Seaway Pipeline to reverse the flow of oil. This will make it transport oil from Cushing, Oklahoma to the Gulf of Mexico the same way as the Keystone Pipeline would. Obama is making a lot of hey out of the fact that he is not stopping this portion of the pipeline. It is al political BS.
Location: Georgia, on the Florida line, right above Tallahassee
10,471 posts, read 15,838,455 times
Reputation: 6438
Unbelievable, but true.
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