Gas is a good that is extremely susceptible to the temptation to hoard. It doesn’t go bad under any reasonable period of time, which means that there’s no penalty for purchasing excess stock in a time of shortage. The only way to discourage this is by explicit rationing or by allowing the price to increase, making people pay a higher price during the shortage.
I haven’t been able to find one economist in favor of the anti-gouging laws. My explicit call for an anti-gouging law supporter on Twitter was met with silence. People from across the political spectrum—Matt Yglesias at Slate to Holman Jenkins at the WSJ—have condemned the laws.
There’s good reason for the widespread condemnation of anti-gouging laws: they are—almost—universally harmful. There’s no public good or special interest benefited by the laws. And especially when it comes to necessities like gasoline, the harm they do is sharply felt by a large part of the population.
So why do we have these stupid laws at all?CNBC NetNet
How to Fix the Gas Shortage: Let ’em Gouge
John Carney | Senior Editor
Why ration by price (willingness to pay more in monetary units) rather than ration by time (willingness to pay in time units by waiting in line)? The argument is, of course, "efficiency." But what makes "efficiency" the criterion rather than, say, fairness.
The "political" argument doesn't hold water either. Politicians are guided by the next election and they know that allowing price-gouging will likely harm their chances of being reelected. While this may be seen as political cravenness, it can also be viewed as being representative of the majority regarding voter wishes, which is what democracy is supposed to be be about rather than "efficiency." It's called effectiveness, and in a democracy, voters get to set the standard for effectiveness.
John says that he hasn't found one economist who favors anti-gouging laws. So? Since when did economists become the arbiters of democracy and not voter wishes as elected representatives see them?
And this is revealing: "I haven’t been able to find one economist in favor of the anti-gouging laws."
ReplyDeleteThis is just like Becky Quick saying: " the “only problem” with Krugman’s conclusion was: “It is hard to find anyone who actually agrees with him.”
Where are these "journalists" looking? Under their desks???
This is AMATEUR hour high jinks...
Hey COMCAST: Are you glad this is what you paid for????
SICKO!
The pipeline being shut down since Monday would somehow be overcome and gasoline would magically transport itself to NJ if the prices were allowed to rise:
ReplyDeletehttp://news.yahoo.com/colonial-pipeline-start-deliveries-jersey-friday-174713805.html
This is an OUTRAGE!
That channel is INFESTED with RADICAL anarcho-capitalists and anarcho-libertarians and Austrian nutjobs...
Mainstream economics is a religious ideology that worships the mystical cult of the Invisible Hand, and exists in both academia and the business world to preach the plutocratic gospel of markets to the submissive masses, and defend the established economic order based on hierarchy and the rule of wealth. So it's not surprising that it's hard to find any of them who don't believe in letting the uninhibited price mechanism determine all outcomes.
ReplyDelete"Why ration by price (willingness to pay more in monetary units) rather than ration by time (willingness to pay in time units by waiting in line)? "
ReplyDeleteIn fact they are getting BOTH, longer wait times for more expensive gas!! What a deal!
"Mainstream economics is a religious ideology that worships the mystical cult of the Invisible Hand, and exists in both academia and the business world to preach the plutocratic gospel of markets to the submissive masses,"
ReplyDeleteThis must be repeated often and without further explanation. It just is. Fight them with their own tactics.
Well said Dan K., except this:
ReplyDeleteSo it's not surprising that it's hard to find any of them who don't believe in letting the uninhibited price mechanism determine all outcomes.
The ownership class does not want outside interference is pricing. But inside is the rule of the day, based on extraction of maximum economic rent. This is absolutely key in understanding how the dirty game misleadingly called "free market capitalism" actually works.
Funny, Political Compass scores me as strongly libertarian. Why don't I agree with libertarians?
ReplyDeleteThere are four quadrants. Do you score as a libertarian of the left or right?
What we now call "Libertarian" with a capital "L" is libertarianism of the right.
So rationing fixes shortages...yeah and dieting fixes famines.
ReplyDeleteIt it irrational to assume that rationing so that those with the greatest amount of monetary savings and therefore control the resource are the best central planners in a shortage.
The only economic solution to a shortage is increasing the supply or displacing the need. It is madness to debate which Malthusian catastrophe has the best form of economic calculation.
Emergency management here in the US is one area where the JG labor could be used to great benefit.... there are so many additional things we could be doing to prepare and deal with these types of emergency situations that happen in the US...
ReplyDelete"There are four quadrants. Do you score as a libertarian of the left or right?"
ReplyDeleteLower-left quadrant, just below and to the left of the center of the quadrant. (-5.5, -5.5)
I don't really know what that means. Labels have never meant much to me, I don't join "groups".
On the political compass there is an x-y axis that results in four quadrants, left-authoritarian and right-authoritarian above the x axis, and left-libertarian and right libertarian below the x axis.
ReplyDeleteTom, Yes, I score left-libertarian. It just has no real meaning to me, other than what group I tend to fall into. They are labels to me and little more.
ReplyDeleteIf I had to self-identify I would call myself "very liberal" but I find myself in disagreement with what many liberals are supporting.
Paul -- Try "progressive". I dislike being called liberal for the same reasons. Also, because it's close to "neo-liberal". So, I call myself progressive.
ReplyDeleteThe Political Compass is a matrix of authoritarian-libertarian and conservative-liberal, which is a pretty standard way of looking at the political spectrum in terms different spectrums. However, as Joe Firestone observed some time ago, it is really too simple to be very helpful. so it is not surprising that you don't find a label for yourself there.
ReplyDeleteMoreover, the meanings of "authoritarian" and "libertarian" and "conservative" and "progressive" are hardly capable of being defined technically because they have shifting denotation and connotation in ordinary language from place to place over time.
Pigeonholing seldom works very well in anything that is at all complex, like the human mind and behavior. Even what people say doesn't always match up with what they do.
Sorry to drop into the debate so late.
ReplyDeleteI don't see why rationing by time spent in line is fairer than prices. In fact, the opposite seems likely to me. People who are time-constrained because they are employed are discriminated against; the idle rich can just spend all day fueling up or driving to some far off place with abundant gas. The busy rich can pay their drivers to fill up. It's the working man who gets screwed.
"Paul -- Try "progressive"."
ReplyDeleteJohn, I do consider myself "progressive" in the sense that I am willing to try anything that looks like it has a decent chance of success, something any good engineer should be expected to do. A pragmatist, not particularly ideological except I believe in helping people that weren't dealt as good a hand as i was. I was born on 3rd base and know it…the problem is the people that were born on 3rd base but think they hit a triple.
Quite true.
ReplyDelete