gas prices

Question of the Day

November 17, 2008: 10:30 AM ET

Good morning and welcome to another rollicking week in the world of free enterprise.

I have a question for you this morning. Yesterday I gassed up my car and found that, for the first time in a while, the tab came in at under $25. I have become accustomed to the habit of not looking at the price on the pump when I make my occasional visits, any more than I watch the Dow every day now. There no point in rubbing one's nose in the gravity of our situation, don't you think? At any rate, I looked at the pump and it said that the price of a gallon of gasoline was $2.21. 

Wow, I thought. That's cheap.

And then I wondered. I mean, we're so conditioned to the price of things spiraling ever-upward that eventually we become totally desensitized to the reality of things. Is $2.21 per gallon really cheap? I just paid $13.34 for some cereal, milk and a banana at Oakland International Airport. Was that cheap? The cab I will take to get from Kennedy Airport to Manhattan will cost me $60. Is THAT cheap? 

In the case of gasoline prices, it's clear to me that the market is totally jobbed, and we are hosed. When the economy is flush, the "law of supply and demand" that governs "rational markets" hoists the price of gas to heights that are so ridiculous they don't bear scrutiny. When the economy tanks, whoops, lookie here, the "law of supply and demand" suddenly drives the price of a barrel of oil downward for exactly as long as it will take for us to regenerate our situation. Somewhere, I am convinced, there's a bunch of guys in a room somewhere (with a hard line to conference rooms around the world) playing canasta and toying with the price of a gallon of gas. 

At any rate, I have a question before I board: When the price of a gallon of oil was below $57 the last time, or hovering near that number, what were we paying for gas at that time. Was it in fact $2.21 or thereabouts? Or was it some other rational number? Like, was it way higher because they were squeezing us around Katrina at that time? Was it lower, because nobody realized at that point just how deeply we could be gouged and still keep our SUV's? Is there somebody keeping score on this thing?

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