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Is the implication “it’s not that bad”? I’m sorry but I disagree. Do you have an explanation for why the increased price of gasoline won’t just infect prices f

Is the implication “it’s not that bad”? I’m sorry but I disagree. Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? Any business which needs to move people or goods over the road, or runs equipment/vehicles on gas is going to be affected. Not to mention the fact that consumers will have less disposable income to spend on things. And businesses may have to pay their workers more to account for that loss of disposable income. Edit: see “wage price spiral”

ceejayoz 5y ago
> Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? It will, but the price of oil has already dropped substantially from the recent peak, and probably will continue to do so.
dahart 5y ago
> Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? The price of gas is known to be volatile, it has gone up in the past without bringing the entire economy along with it, and also has gone down many times without making everything cheaper. The prices of retail goods don’t adjust instantaneously, and gas may well be below what it is now by this time next year. The price of gas might be a small minority fraction of the cost of producing most retail goods as well, so there’s no reason to assume that consumers will tolerate compensatory price hikes that blame gas while the price is falling. This is the reason that the US Department of Labor excludes the price of gas as one of the core indicators of inflation, because the price of gas does not always reflect inflation, and frequently changes for other reasons independent of inflation.
iso1210 5y ago
Today's US gas price is about $4/gal [0], about 15% up on 2011[1], or about 1% per year. That doesn't sound like rampant inflation, it does sound like a market correction. Now in reality gas prices globally is high because of Ukraine and Russia, which hides the massive gas deflation over the last decade, but if 2011 businesses could afford gas at $3.50, I'm not sure why 2022 businesses can't afford it at $4. Wages are up about 30% in the same time period (well by 2020) [2] [0] https://gasprices.aaa.com/ https://gasprices.aaa.com/ [1] https://business.time.com/2011/12/20/2011-is-priciest-year-ever-for-gasoline-3-53-per-gallon-over-4k-spent-per-household/ https://business.time.com/2011/12/20/2011-is-priciest-year-e... [2] https://www.ssa.gov/oact/cola/awidevelop.html https://www.ssa.gov/oact/cola/awidevelop.html
lottin 5y ago
The implication is not that it isn't bad, but that it is a supply and demand issue rather than a monetary issue.

ceejayoz 5y ago

> Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? It will, but the price of oil has already dropped substantially from the recent peak, and probably will continue to do so.

dahart 5y ago

> Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? The price of gas is known to be volatile, it has gone up in the past without bringing the entire economy along with it, and also has gone down many times without making everything cheaper. The prices of retail goods don’t adjust instantaneously, and gas may well be below what it is now by this time next year. The price of gas might be a small minority fraction of the cost of producing most retail goods as well, so there’s no reason to assume that consumers will tolerate compensatory price hikes that blame gas while the price is falling. This is the reason that the US Department of Labor excludes the price of gas as one of the core indicators of inflation, because the price of gas does not always reflect inflation, and frequently changes for other reasons independent of inflation.

iso1210 5y ago

Today's US gas price is about $4/gal [0], about 15% up on 2011[1], or about 1% per year. That doesn't sound like rampant inflation, it does sound like a market correction. Now in reality gas prices globally is high because of Ukraine and Russia, which hides the massive gas deflation over the last decade, but if 2011 businesses could afford gas at $3.50, I'm not sure why 2022 businesses can't afford it at $4. Wages are up about 30% in the same time period (well by 2020) [2] [0] https://gasprices.aaa.com/ https://gasprices.aaa.com/ [1] https://business.time.com/2011/12/20/2011-is-priciest-year-ever-for-gasoline-3-53-per-gallon-over-4k-spent-per-household/ https://business.time.com/2011/12/20/2011-is-priciest-year-e... [2] https://www.ssa.gov/oact/cola/awidevelop.html https://www.ssa.gov/oact/cola/awidevelop.html

lottin 5y ago

The implication is not that it isn't bad, but that it is a supply and demand issue rather than a monetary issue.