Re: Inflation confuses me.
The only trouble with that much-sited statistic is that it would be a valid point only if Americans wages kept up with inflation. Big Oil likes to say that the current price of gasoline is relatively “cheap” because adjusted for inflation it was higher in 1981. However, the inflation-adjusted wages of the vast majority of Americans went backwards by almost 20% during the 12 years of the Reagan/Bush administrations (1981-1992), and although that was reversed during the eight years of the Clinton administration (1993-2000) with the fastest and longest inflation-adjusted wage growth since the 1960s, that was reversed again over the last five years with inflation-adjusted wages going backwards once again. So for the consumers of gasoline, the real cost of gasoline (and oil and heating oil) is higher than ever.
It’s this stealthy loss of one’s Standard of Living that is indeed a confusing aspect of inflation to many people, as they don’t realize that it’s happening to them.
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