"A Gallon of Gas" was released by The Kinks in August 1979 and tells of the economic problems of the time, in this case, the gas shortage. A line from the song, which was the ninth track on the Low Budget album, that feels like it could’ve been ripped straight from today’s headlines:
“I can’t buy a gallon of gas… even if I’ve got the cash.”
Source: YouTube
Ray Davies was singing about the late-1970s energy crisis…long lines at the pump, shortages, frustration boiling over. Back then, gasoline wasn’t just expensive. It was scarce. And the economic damage was very real.
Rolling Stone said that "A Gallon of Gas" is "no great poetic achievement, but its slow, bluesy arrangement is meant, no doubt, to re-create the effect of a snail's pace gas line. If you are unfamiliar with this somewhat obscure song from the British invasion band, I have included a YouTube link to the video below.
The Kinks - A Gallon of Gas (Official Audio)
Fast forward to 2026, and if you only paid attention to the headline-driven narrative, you would think we were living through a sequel.
Turn on financial TV or scroll through your news feed, and the storyline is familiar: gas prices are rising, the consumer is about to crack, and the economy won’t be far behind. It’s a clean narrative. It’s intuitive. And it’s increasingly being treated as fact—despite the data telling a different story. It's also becoming increasingly outdated and isn't supported by facts.
The fear comes from memory. In the 1970s and early 1980s, oil shocks hit an economy that was heavily dependent on imported energy, far less efficient, and dealing with stagnant wage growth. Gasoline wasn’t just another expense; it was a meaningful share of household budgets. By 1980, Americans were spending more than 6% of their income on energy, as shown in our first chart below.
Today, that number is closer to 2%.
That’s not a rounding error. That’s a structural shift in how the economy works.
Even more important, the relationship between wages, efficiency, and gasoline consumption has changed dramatically. According to research from our friends at Wisdom Tree, in 2008, the last major oil spike before the pandemic, gas hit about $4.09 per gallon. The average car got roughly 21 miles per gallon, and the average worker earned about $18 an hour. To drive 10,000 miles, you needed about 476 gallons of gas, which meant the typical worker had to put in around 108 hours to cover fuel costs.
Today, even with prices pushing toward $4 and potentially higher, the math looks very different. The average vehicle gets about 28 miles per gallon, and wages are closer to $32 an hour. That same 10,000 miles now requires fewer gallons and far fewer hours of work—closer to 44.
In other words, the burden of gasoline has been cut by nearly 60%.
Put differently, if we wanted today’s gasoline shock to feel like 2008, we wouldn’t be talking about $4 or even $5 gas. We’d be talking about something closer to $9 or $10. That’s a part of the story that tends to get less attention in the headlines. Why? Because it doesn't generate panic or align with the narrative they're trying to create.
There’s another shift that doesn’t get enough attention, and it may be the most important one: the United States is no longer just a consumer of energy. It’s a producer. In fact, it’s now a net oil exporter and the world’s top oil and gas producer, as you will see in our second chart below.
For nearly five decades—from the early 1970s through 2020—the U.S. was structurally vulnerable to global oil shocks. When prices rose, it was almost entirely a negative. Wealth flowed out of the country, margins got squeezed, and consumers pulled back.
Today, the picture is more balanced. Higher oil prices still pinch at the pump, but they also support domestic production, investment, and employment. They’re not purely a tax on the economy anymore…they’re closer to a redistribution within it.
That matters when considering geopolitical risks, such as the current conflict involving Iran and the disruption of traffic through the Strait of Hormuz. Roughly 20% of the world’s oil flows through that narrow passage, which sounds alarming, and it is, globally. But nearly 90% of that oil is headed to Asian markets, not the United States, as shown in our next chart below.
So while rising oil prices still ripple through the global economy, the U.S. is less directly exposed than it once was. We’re not insulated, but we’re also not sitting in the same vulnerable seat we occupied in 1979 or even 2008. At the same time, the economy itself has become less energy-intensive.
Vehicles are more efficient. Hybrids and electric vehicles are gaining share. Supply chains are smarter. Technology has quietly reduced the amount of fuel we need to sustain the same level of economic activity. All that raises the bar for when gasoline prices actually become a meaningful drag.
So why does it still feel so bad? Because perception doesn’t adjust as quickly as reality.
Because gasoline prices are one of the most visible prices in the entire economy. You see them on your commute, in giant numbers on every corner, multiple times a week. There’s no hiding from them. They don’t show up once a month like a utility bill or get buried in a credit card statement. They’re front and center, every day.
The media also makes sure that you are aware. As you will see in our final chart below, once gasoline prices hit $3.50 a gallon, media coverage of gas prices begins to spike. And both consumers and markets tend to react to what’s most visible, not necessarily what’s most impactful.
That doesn’t mean there’s no risk here. There is. But it’s a different kind of risk than the one dominating the narrative.
The real issue isn’t just how high oil prices go…it’s how long they stay there.
A short-term spike? The modern U.S. economy can absorb that relatively well. A prolonged period of elevated prices is where things get more complicated. That’s when you start to see pressure build—on margins, on inflation, and potentially on growth. Duration matters more than the headline price.
That nuance tends to get lost in the rush to compare today’s environment to past crises. Back in the late 1970s, Ray Davies was singing about a world where you couldn’t get gas, even if you had the money. That was a true supply shock layered on top of a structurally fragile economy.
Today, we’re dealing with something different. Gas is available. The economy is more efficient. Wages are higher. And the U.S. plays a very different role in global energy markets.
It’s not that gasoline prices don’t matter. It’s that they don’t carry the same economic weight they used to.
Which brings us to the part that matters most for investors. The market loves a familiar story. Rising oil prices hurting consumers is one of the oldest scripts in the book. But like any long-running franchise, sometimes the sequel doesn’t quite match the original.
The risk isn’t that higher gas prices will automatically derail the U.S. economy. The risk is that investors react to that assumption as if nothing has changed over the last five decades. As always, context matters.
If you find yourself filling up the tank and thinking about The Kinks, you’re not alone. It’s a great song. It just may not be a great economic forecast.
And if gas prices keep rising from here, we’ll keep watching—not just the price, but the persistence. Because in today’s economy, it’s not the spike that does the damage. It’s the staying power.
Rising gas prices still make for bad headlines, and occasionally bad moods at the pump, but they don’t automatically translate into bad outcomes for investors.
The U.S. consumer is stronger, more efficient, and less exposed than in past cycles, and the country itself now benefits in ways it didn’t decades ago.
That doesn’t eliminate risk, but it does change the playbook. So before assuming this is “1979 all over again,” it’s worth remembering: the music may sound familiar, but the economy has changed the tune.
It turns out $4 gas isn’t what it used to be. I thought it was important to put this story in the context of today's economic and geopolitical backdrop as we continue “Moving Life Forward.”
© 2026 Jesse Hurst
Senior Wealth Manager
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