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Free Market Project

3/7/2006 12:45:49 AM

Updated 02/24/06
 


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Memo to Media: Gas Prices Still Far from All-time High
NYT is one of few to admit ‘record’ isn’t really a record.

by  Megan Alvarez
July 13, 2005

     Reports on “record high” gas prices have been rampant again in the mainstream media – but they’re still not true. These reports defied basic economics by not taking into account past gas prices adjusted for inflation.

     A prime example of this was anchorman Bob Schieffer of the “CBS Evening News,” who reported on July 12, 2005, “Drivers are already paying record-high gas prices – $2.33 a gallon on average for self-serve regular.”

     Schieffer was not the only broadcaster misreporting. NBC’s “Today” on July 12, 2005, provided its viewers much confusion. Matt Lauer opened the segment on gas prices saying, “The price for filling up your tank has jumped more than 10 cents to hit an all-time high of an average $2.33 a gallon.” He added, “With gas prices at a record high, is there any relief in sight?”

     However, later in the segment Lauer corrected himself: “I guess we should mention to people that when you take inflation into account, we're still not seeing the record highs of like 1981 when it was again adjusted for inflation about $3.03 a gallon.” Lauer’s reluctance in reporting this information was understandable, considering it undermined his earlier comments.

     Several of the nation’s major newspapers also falsely reported on gas prices on July 12, 2005, including the Los Angeles Times and USA Today, which featured the headline “Gasoline Jumps to Record.” In line with the trend, neither newspaper included any mention of inflation.

     Reporting on record-high gas prices without taking inflation into account misinforms the audience. Inflation-adjusted prices are not hard to come by; in fact, The New York Times featured a story titled “The Oil Uproar That Isn’t” in its July 12, 2005, edition.

     The story by Jad Mouawad and Matthew Wald correctly stated that gas prices in early 1981 were higher than they are today. The article noted that adjusted for inflation, gas prices in early 1981 were about $3 a gallon. This was when oil, again adjusted for inflation, was priced at about $86 a barrel, roughly $20 higher than it is today.

     Reports like Mouawad and Wald’s are in the minority. Much of the mainstream press routinely hypes gas and oil prices. The Free Market Project has been following this trend. “NBC Fuels Gas Price Hysteria” and “Network Doomsday Warnings Run Out of Gas” documented the constant gas price coverage that dominates the news. These stories detailed two common occurrences in the media. First, the media’s constant scrutiny of even minute changes in oil and gas prices fuels the idea of a crisis even when there is not one. Secondly, the media consistently made predictions that turned out to be completely untrue. These mistakes were a result of the overwhelming emphasis on gas and oil prices.

 


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