The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
Ernest Hemingway (1899–1961), author
Economy Shows Signs of Strain From Oil Prices reads a front page headline on the New York Times website. What a surprise!
The article says Wal-Mart blames energy prices for not meeting quarterly profits. Airlines are again feeling the pinch, and the winter fuel needs have yet to come into play.
Here is my favor line: Without question, economists say, rising oil prices cause less economic pain than they once did. It takes half as much energy to produce $1 of gross domestic product today, adjusted for inflation, than it did 30 years ago. Even at today's prices, oil is cheaper than it was in the early 1980's, once adjusted for inflation.
It does not seem that we should compare products based on an adjusted for inflation index unless everything is based similarly. We can’t adjust our pay checks for inflation. Adjust my home for inflation and it’s worth $2 million, but you say my home value is current. So are the gas prices. They have not stayed stagnant. My salary is current, adjust it for inflation and I should be making something akin to a poor mid-level executive. Adjusted for inflation seems a bogus yard stick.