Many of the current statistics on the housing crisis as well as gas prices are a bit misleading, keynote speaker William Strauss told business leaders at the Multi-Chamber Economic Forecast Luncheon.

“According to Benjamin Disraeli, a British prime minister in the 1800s, there are three types of lies,” said Strauss, senior economist and economic advisor in the economic research department at the Federal Reserve Bank of Chicago.

“There are lies. There are damn lies. And then there are statistics.”

When considering that the current price of crude oil is more than $90 a barrel in comparison to its 1980 price of $40 a barrel, many Americans see that increase as indicative of oil companies’ tactics to earn more substantial profits.

“It’s a big mistake to present information like this,” said Strauss. “It’s not adjusted for inflation. When we adjust for inflation, we find out that the prices that we’ve been experiencing over the past year, while quite high, are not record prices.

“In fact, the 1980 price of $40 a barrel, when adjusted for inflation, is up over $100 in today’s economy.”

If anything, the low price of gasoline that Americans experienced in the late 1990s is something of an anomaly.

“It also created a whole new industry in Detroit: the sport utility vehicle,” Strauss said. “If energy prices had remained at a relatively higher level, nobody in their right mind would’ve thought about buying a car like that, a big gas-guzzler, which today, at $3 a gallon for gasoline, people just really don’t want to buy.”

The good news, said Strauss, is that these elevated prices for petroleum will not impact the economy enough to send it into a recession, citing increased energy efficiency that’s been built into autos, manufacturing and other processes through technological advances.

“The number of BTUs, British Thermal Units, needed to produce a dollar’s worth of GDP has been cut in half over the past 60 years,” said Strauss. “Compared to the 1980s, it’s been cut down by 25 percent.

“Even if we had the same energy shock as we went through in 1980, our economy can weather that shock far better today than we could in the past.”

Creating fuel from food as an alternative source of energy has become widely accepted, with ethanol production hiking corn prices to record highs.

“We’re producing corn in acreages that were never used in the past,” Strauss said.

This has forced the prices of wheat, soybean and other commodities to move higher, resulting in a rise in inflation in the food sector.

Strauss also touched upon the issues facing the residential housing sector, specifically the cause for the downturn.

“The problem is adjustable rate mortgages,” said Strauss. “For borrowers that have taken out a fixed rate product, they’re fine. It’s those individuals who, for one reason or another, went with an adjustable rate product.”

The teaser rates given to homeowners at the beginning of their mortgage lulled them into a false sense of security. They assumed that they would be able to sell before the higher rates kicked in after two to three years.

“Guess what?” Strauss said. “Two or three years have passed and people can’t sell the house or if they do they’ve got to sell it at a substantial discount because they didn’t put very much into the home.

“So they’re upside down on many of those mortgages. It’s not a good situation and it’s partly why we’re seeing this stress that’s happening.”

Yet with every rain cloud comes a silver lining, Strauss pointed out.

“Incomes are continuing to rise, mortgage rates are going lower and homes are adjusting to make them more affordable,” said Strauss. “For all those reasons, people are going to soon begin to think that houses aren’t as expensive as they once thought they were.

“Eventually, people are going to say, it’s time to make our move. I think that might occur sooner rather than later.”