Overcompensation
Friday, May 27th, 2005What is it about humans that makes us exaggerate and overcompensate? If I apply force to something and it doesn’t budge, I will next apply too much force and bust the thing to smithereens. I did that with a bag of chips once. As I grow older and wiser, I learn to make smaller movements, but many people don’t learn or they forget to apply that philosphy in new contexts.
I am tired of listening about gas prices on the news and people complaining about it. They drive around in their $50K SUVs, pick up $4 lattes at Starbucks, and complain that gasoline costs $2/gallon. Puhleez!
Let me explain it this way: If you adjust for inflation, gas prices are at a historic low. Believe it. In 2004, gas was about $1.88 per gallon, and in 1980 it was $2.87 after adjusting for inflation. After the low in 2004, the price per barrel rose from $20 to about $50, and people freaked out. If we had spread out the increase over 25 years, nobody would have noticed. But the market overcompensated, and so has our perception of what happened.
Besides the recent jump in price, another reason people think gas is expensive is because other things cost about the same now. This article has a chart of prices after inflation that shows how things like bannanas and eggs are cheaper in price while the price of other things rose faster than inflation.
Maybe I shouldn’t complain that people are complaining, because some good has come from it. The hybrid gas-electric vehicles are having some success. Especially, Toyota’s Prius. While Honda’s Insight is technically superior in gas mileage, it went too far with redesign. Prius is practical and cool, and it significantly outsold Insight. Small movements.
So while gas prices aren’t really as high as we think, let’s continue overcompensating by buying more fuel-efficient vehicles that will lead to alternate fuels. We’ll be better off for overreacting. Now, I wonder if I can convince my boss to overcompensate on my salary. Hm…