I sat down to watch the 1988 action film Die Hard recently as itâ€™s one of my favourite Christmas films of all time. Partway through, I saw something interesting that got me thinking about gas prices.
During a scene early in the film, actor Reginald VelJohnson, who plays as a cop, is seen inside a gas station shoving a dozen packages of Twinkies into his arms; enough so, that he barely makes it to the register without losing them. This post wonâ€™t be about the recent Hostess factory closures in the US, although I was very saddened by that news.
After Mr. VelJohnson exits the gas station, he gets a call on the police car radio informing him of a distress call which came from the fictional Nakatomi Plaza in Century City. He is ordered to go check out the scene and report anything unusual. Just after this, Mr. VelJohnson walks toward an empty road and at the end of this road we see the very large skyscraper, which is Nakatomi Plaza. If you look up, they can see that gasoline was being sold for 74 cents a gallon. Die Hard was released worldwide in the summer of 1988 and was filmed in late 1987.
I actually lived in Los Angeles for 2-and-a-half years. One of my happiest memoirs was visiting the Century City Plaza, an outdoor shopping mall near in the Westwood area of Los Angeles. After going for the first time to see the outdoor mall, which the Shops of Don Mills in Toronto is modelled after, a friend of mine pointed to a large skyscraper close by. He asked if I remembered Die Hard and my heart skipped a little. It then took another skip when he told me that the film Conquest of the Planet of the Apes was filmed on location where the mall is now. Needless to say, the nerd in me freaked out a bit.
I did a little research on gas prices and as I write this post (February 8th, 2013) gas prices at the nearby city of Santa Monica today averaged about $4.20 per gallon. Thatâ€™s roughly a 500% increase from 25 years ago. According to one inflation calculator, that which cost 74 cents back in 1987 should cost $1.46 as of 2011. This is an increase of $2.74 over inflation.
“I wanted to do a comparison with another product that is heavily dependent on government monopolization, which cuts down on supply and increases in price over time, and thatâ€™s Postal products. According to Answers.com, a single US postage stamp in 1988 cost 25 cents and while the cost of a stamp today on First Class mail is 46 cents, just below the rate of inflation. Despite this, the US Postal Service looses roughly $42,000 per day (http://cnsnews.com/news/
By the way, itâ€™s obviously not just Die Hard that demonstrates how gas prices have risen several hundred percentages over the rate of inflation in recent years. Pick any film from just 5 years ago and there will be a noticeable increase if a gas station is visible on screen.
The aforementioned stamps are just one example but government forms, licensing fees, health care, college tuition, etc are on the rise and have risen beyond the rate of inflation for many years. Yet, one should ask why the price of electronics and other private-use consumer products are always falling? Early cell phones cost $4,000 (or $6,131.20 adjusted for inflation) over 20 years ago and the first Betamax recorder, the predecessor to the VCR, cost $2295 (or $12,346.76) when it first came out in 1975.Â Can any of you imagine paying over $6000 for a cell phone and over $12,000 for a DVD or Blu-Ray player today?
My conclusion will be a no-brainer for anyone who knows how inflation works or understands the free market in general. Without government monopolization, these now government monopolized products and services would likely decrease in price every year rather than increase.
So why does no one we elect get this?