One of Ours

...Gasoline today is no more expensive today than it has been for most of the postwar period, and it is considerably cheaper than it was in the late 1970s and early 1980s...

[...]

...Comparing today’s prices with those of yesteryear is a meaningless exercise unless the prices are given in constant, or “real,” dollars. And in real dollars, gas prices today are — well, normal.

Sure, the $2.03 being charged at the pump today seems high. But in actual financial terms, it’s a lot less onerous than the $1.25 a gallon motorists were paying in 1980 — a whopping $2.80 when translated into 2004 dollars. (Adjusted the other way, today’s $2.03 pump price is equal to 89 cents in 1980 dollars.) When it comes to historical price comparisons, nominal dollar amounts signify little. It is the inflation-adjusted price that tells you whether the true cost of a product has increased, decreased, or stayed the same...