In 1980, in Portland, Oregon, I typically filled up, under these draconian conditions, for an average of $1.24 per gallon. Adjusted for inflation, this comes out to $3.18 today. (I filled up in Lodi, NJ, last weekend for $2.92, and that was the highest I’d seen it in quite awhile.) A short year later, however, 9 months after Reagan finished deregulating oil and gas, the price fell to $0.80/gallon.

In 2001 (pre-9/11, pre-war), I could fill up near my home for $1.54/gal. Adjusted backward for inflation to 1981, that price was – you may have guessed it – $0.80. So for twenty straight years, the price (and supply) of gas was actually disgustingly stable, only subject to the effects of currency inflation.

He also notes:

The other day, I saw crude prices hit a peak of $104 a barrel. But that’s about €68. So, if by some miracle, the dollar could restrengthen itself back to par with the Euro (seems like a forlorn hope, I know), the crude price would lower itself accordingly to $68 per barrel, which would mean a savings of about $1.30 at the pump.

The price of gasoline hasn’t changed, but the value of the dollar certainly has. Funny, how no matter how much we want to blame big oil, somehow the price stays stable against a stable form of currency.

Technorati Tags: Economics

Today, Michael Miller at the Acton Institute has a moral response to advocates of microfinance. There are nasty problems lurking in the shadows, for which microfinance may result in the exact opposite effect than intended.

Technorati Tags: Economics, Microfinance

“… Democracies adopt bad policies because most people are irrationally committed to systematically mistaken economic (and other) beliefs, and politicians have to heed public opinion to get elected”

So much for bringing democracy to the rest of the world.

Technorati Tags: Economics, Philosophy, politics

I do to improve my sense of well-being? New field of Positive Psychology points to gratitude, forgiveness, and optimism as actually making people happier.

An economic case for a Christian idea.

Technorati Tags: christian, Economics

There are people I knew who don’t comprehend the concept that if people consume less of a product, the price of that product tends to drop. One gentlemen, in particular, whom I shall call ‘D’, thought that price controls were the only way to drive down gasoline prices. D claimed to be a history major in college, so I gave him a brief history lesson about the long gas lines caused by price controls in the 1970′s, of which I had the priviledge of experiencing. That did not shake his resolve. When I asked him who should decide what the ceiling price should be, D said he didn’t know, but that it should be decided by government nonetheless. I let his circular argument run for two or three laps before I left to do something more edifying.

Sometimes I get a sense of vindication when I see the basic laws of economics play out contrary to socialist and fascist thinking. Of course, he still probably doesn’t get it.

Imagine that. Gas prices go up, and people cut back on driving. Some of my more clueless friends think that the only solution to high gas prices is price control and windfall profits taxes. There’s nothing like cutting back on driving and carpooling to drive up supply and gas prices down.

I say, to molify their moral indignation, that if you really want to stick it to the oil companies, you should car pool. That way they won’t be taking so much of your money. Now I realize that carpooling doesn’t really stick it to the oil companies, but my point is that if they are truly serious about doing something about gas prices, they can actually do something about it, and have an affect on what they spend on gasoline. I also realize, they aren’t truly serious about doing anything about gasoline prices, because they would rather see governments truly stick it to the oil companies so they can drive whenever they wish.

Am I cutting back? Yes. I’m telecommuting as much as I can. I’m avoid ing sitting in rush hour traffic and burning $3.00/gallon gasoline.

[Addendum: Read the comments of the posting I reference. There are problems in the USA Today article referenced therein, but as Carson notes, good points are made in the headline]

• Frederic Bastiat: What is Seen and What Is Not Seen
• Frederic Bastiat: The Law, Russell translation: Library of Economics and Liberty
• Henry Hazlitt: Economics in One Lesson: 50th Anniversary Edition.

These are all fast reads. The Hazlitt helped form my thinking on the subject.

Here’s my first post from the Day’s Inn in Grand Rapids. We start the Acton Institute program tonight. There are at least four other people from Talbot here.

I’m sharing a room with a recent graduate from Princeton who used to work for Robert P. George.