With some headlines blaring about "record oil prices," a bit of perspective is in order. It is true that in nominal dollars, the price of crude oil has never been higher. However, in inflation-adjusted terms, the picture looks somewhat different. It turns out that the price for a barrel of oil peaked at about $98 in December 1979.
Still oil prices have tripled in the past four years, but the economy nevertheless chugs along. . . . the price of oil would need to double from today's $70 per barrel to have the same impact on the U.S. and world economy that prices had during the 1970s oil crisis.
Apparently the public isn't as concerned about gas prices as the media is:
Consumers shrugged off higher gasoline prices in April and sent a widely watched barometer of consumer confidence to its highest level in almost four years, a private research group said Tuesday.
Then again, most of the news reports and political slogans about "record high" prices is merely sensationalism.
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