This Boston Globe article takes a very reasonable look at how high our gas prices really are.

But these stories, and many others like them, leave out something essential: inflation. Comparing today's prices with those of yesteryear is a meaningless exercise unless the prices are given in constant, or "real," dollars. And in real dollars, gas prices today are -- well, normal.

Sure, the $2.03 being charged at the pump today seems high. But in actual financial terms, it's a lot less onerous than the $1.25 a gallon motorists were paying in 1980 -- a whopping $2.80 when translated into 2004 dollars. (Adjusted the other way, today's $2.03 pump price is equal to 89 cents in 1980 dollars.) When it comes to historical price comparisons, nominal dollar amounts signify little. It is the inflation-adjusted price that tells you whether the true cost of a product has increased, decreased, or stayed the same.

(Hat-tip to James Joyner: here and here)