"Oil hits record near $61," proclaims Reuters. "Oil prices close at all-time high," announces MSNBC. "Crude oil closed about $60 for the first time ever," declares CNBC. Well, yes and no.

See, light sweet crude -- which always sounds like a dessert topping to me -- closed at about $60 a barrel today, but that's in 2005 dollars. A 2005 dollar isn't the same thing as a 2004 dollar, or a 1994 dollar, or, especially, a 1980 dollar. In 1980, crude was trading for about $38 a barrel, but that's a mind-blowing ninety-five bucks a barrel in 2005 dollars. . . .

Is gasoline too expensive? You bet. When gas prices rise, it's like dropping a sea anchor on the whole economy. But oil prices are nowhere near record levels in terms of actual dollar value per barrel. Today oil is trading at about two thirds of the value per barrel it was trading at in 1980. The economy didn't collapse then, and it won't collapse now.