The Plunge in Gasoline
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
“Gas Price Up 83% During Obama” is the headline up on the Drudge Report this afternoon. It links to a CNS dispatch on the fact that President Obama is citing the soaring price of gasoline as one of the reasons he wants a cut in the payroll tax. We remarked on this point a year ago, when Mr. Obama, in his weekly radio address, declared that there was “no silver bullet” to deal with rising gasoline prices. We noted the irony that the president should choose such words, because if one priced gasoline in ounces of silver — which was, after all, the specie that the Founders of America anticipated as the national form of money — the value of a gallon of gasoline had been dropping.
We took at look at it this afternoon in ounces of gold— which is the classical method of determining value — and in ounces of gold the value of gasoline has slumped some more. Today the dollar price of a gallon of gasoline, using the price chart we compiled with the latest numbers, is actually up 87% from when Mr. Obama acceded to the presidency. But the value of the gasoline in ounces of gold has plunged 7%. It’s down more than 60% since President Bush acceded. In other words, its not the gasoline that has been going up in value. It’s that the dollar has been doing down in value. The sinking feeling everyone is getting every time they fill up the tank turns out to be completely unrelated to the value of gasoline. It’s the value of their money.
Who is the politician to hammer home this point? Who is the leader who can illuminate this point for voters? The problem with the Federal Reserve is not an abstract thing. It is that the value of the dollar has almost completely evaporated during the almost 100 years that the Fed has had responsibility for it. Chairman Bernanke likes to talk about how people don’t want to buy gold but rather groceries and gasoline and other goods. But groceries and gasoline and other goods don’t measure a constant value. This is done by gold, and it is the collapse in the value of our money that is dragging down the spirit. No politician — not even Congressman Paul, though he has done the best so far — has figured out yet how to bring this home to the voters. When one does, watch out.