You would think, when the new S/W FI numbers come out, and they're as bad as this, that the mainstream media would hold someone responsible. But, so far, nothing.
Maybe it's because the average person doesn't understand the S/W FI. Or doesn't think it effects them. But whose fault is that?
Whenever gas prices hit what sounds like a new record -- this week it was $3.05 -- journalists seem to be contractually obligated to point out that it isn't really as bad as you think. They can cite some time or other when it was worse, either in the 70s, by adjusting the number for inflation, or the 1700s, because internal combustion hadn't been invented yet, and the only way to travel using gasoline was to set fire to your horse.
(I'm not clear on how that's supposed to make you feel better about being gouged. Maybe gas cost more one weekend in 1973, but Mary Tyler Moore was on TV. That was a funny show. You could stay home and watch that.)
(Also, it's kind of a cheat to factor in inflation when comparing gas prices, since gas prices are one of the factors that drive inflation. When the price of gas goes up, the price of everything goes up, which means, comparatively, gas stays the same. It just costs more.)
(It's a little like saying my pants fit me just as well as they did when I was eight, because every time I gained weight I bought bigger pants.)
This is why economists calculate the true cost of gasoline using S/W FI. By this measure, gas prices are more than twice what they were in the early 70s, and almost three times higher than they were in the late 60s. In fact, they're at their highest levels since the Federal government started collecting the relevant data.
The S/W FI is generated by measuring the consumer-cost of a gallon of gasoline against the hourly minimum wage, multiplying that by the fuel efficiency of the average car (expressed as a constant) and expressing the result in miles.
For example, in 1956, when the minimum wage was a dollar, gas cost thirty cents a gallon, which made the S/W FI 66.6 miles. A worker making minimum wage for an hour could relax by driving in circles for sixty-six miles. Which was what you did in 1956.
In 1968, the minimum wage was $1.60 and gas cost thirty-four cents. Which meant an hour's work purchased 94 miles of tooling around.
When Bush took office, the minimum wage was $5.15 and gas cost $1.56. So the S/W FI was 66 miles. Roughly the same as in 1956, which was also where he promised to return America culturally, intellectually, and in terms of race relations.
This week, gas costs $3.05 and the minimum wage is $5.15. The S/W FI is 33.6 miles. Half of what it was at the end of the Clinton years. A third of what it was thirty years ago.
Here's why it feels like you don't have any money, even though talk radio says you do: Because you don't.
Why don't more people report on the S/W FI? Because I just made it up this morning.
But it's still at least as valid as that newspaper ad from the Petroleum Institute with the cut-up dollar, showing that they don't make much money, after the money they pay themselves.
And it's at least as relevant as when Rush Limbaugh says liberals ignore the great news about the economy, like when Standard & Poor's is up.
I think the S/W FI -- or Springsteen/Wilson Freedom Index -- is a pretty good measure of quality of life. Which is why I named it after Bruce Springsteen and Brian Wilson. In America, your freedom can be measured by how much leisure (driving around) you earn from how much labor (working a crappy job).
If you don't believe me, ask every rock song ever written.
The Springsteen/Wilson Index
Minimum Wage (in miles)
2007 33.6 miles
2004 53.6 miles
2000 66 miles
1996 69.2 miles
1992 71.4 miles
1988 69.6 miles
1984 51.6 miles
1980 50.8 miles
1976 77.8 miles
1972 88.8 miles
1968 94 miles
1964 83.2 miles
1960 64.4 miles
1956 66.6 miles
Sources: Energy Information Administration / US Department of Labor
Your mileage may vary.