Reason Magazine
- reason.com
- reason.tv
- reason.org
- Donate
- Site Search:
Reason on Facebook
Reason on Twitter
Reason on YouTube
Reason RSSGet Reason E-mail Updates!
Manage your Reason e-mail list subscriptionsadvertisements
How Are Those Groovy Price Controls Working Out, Hawaii?
According to the Pacific Business Journal,
Hawaii again has the most expensive gasoline in the nation, with a statewide average price of $3.45 7/10 that far exceeds that highest levels reached by any Mainland state in the days after Hurricane Katrina.
For a Hawaiian who's not full of gas, try here. Meanwhile, you'll be happy to know that the home page of the Dept. of Energy -- wait, didn't some political party want to abolish that? -- still features prominently a link to the Gas Price Hotline, where you can fink on gougers. Funny, there's no room on the form to list politicians who make policies that inevitably result in price-hikes....
And in the read-it-and-weep category, comes this Houston Chronicle article from Sept. 7. Excerpt:
Just weeks after shepherding through a massive, comprehensive energy bill, members of the Senate Energy and Natural Resources Committee were grappling Tuesday with ways to lower prices at the pump.
"The things that were not politically possible two months ago are still before us and require an answer," Committee Chairman Pete Domenici, R-N.M., said.
"We can either ignore them or we can act. I say we act," he added. [...]
Sen. Byron Dorgan, D-N.D., for instance, will introduce legislation today that would impose a windfall profit tax that would hit oil companies when the price of crude tops $40 a barrel. [...]
Sen. Maria Cantwell, D-Wash., is calling on Congress to reinstate an authority the president had until 1981 to impose controls on gas prices. [...]
Sen. Craig Thomas, R-Wyo., wants to explore the idea of lowering speed limits, a notion reminiscent of the time when Congress reduced interstate highway speeds from 70 to 55 mph.
|9.19.05 @ 3:09PM|#
Sen. Craig Thomas, R-Wyo., wants to explore the idea of
lowering speed limits, a notion reminiscent of the time when
Congress reduced interstate highway speeds from 70 to 55
mph.
Isn't Wyoming the state famous for lax speed enforcement?
|9.19.05 @ 3:20PM|#
I was just a little one back then, but I miss those Carter years
with the endless lines to buy gas.. and the introduction of locking
gas caps. Y'know, because there was an incentive to steal fuel out
of other peoples' cars?
Fuck the pledge of allegiance. Kids should be forced to recite
basic economic principles every morning.
|9.19.05 @ 3:23PM|#
I pledge allegiance to the curve
Of supply and demand in equilibrium
And to the principle for which it stands
Market pricing, with low transaction costs
Yields utility and profit for all.
|9.19.05 @ 3:28PM|#
Good one thoreau.
Josh, Montana has pretty lax speed enforcement. They had the basic
rule for a couple of years (i.e. no speed limit). Unfortunately
they went back to a 75 mph speed limit.
|9.19.05 @ 3:29PM|#
Matt L:
Problem is you have the score of the wrong game. The game is what
can I do to get elected? The score is way different.
|9.19.05 @ 3:32PM|#
Sooooooooooo.......
Is it unusual for Hawaii's gas prices to be higher than the rest of
the country's?
Matt Welch|9.19.05 @ 3:36PM|#
joe -- No, for reasons that are partly spelled out in that second link. After the first week or so of Hawaii's experiment, prices shot down, and the backers of the bill proclaimed victory & Eternal Wisdom. This here was the result of Week Two, or something like it.
MP|9.19.05 @ 3:37PM|#
From the article:
"We continue to urge the public to give this law a chance to
work"
This is when one should be truly glad we have a Federal system. I'm
thrilled that Hawaii has enacted price controls. I look forward to
the continued hilarity. And I urge the nitwits in DC to give this
law a chance to work in Hawaii instead of rushing to get a seat on
the price control train.
|9.19.05 @ 3:46PM|#
Sen. Craig Thomas, R-Wyo., wants to explore the idea of
lowering speed limits, a notion reminiscent of the time when
Congress reduced interstate highway speeds from 70 to 55
mph.
I don't get it. Big empty Western states were the ones that wanted
to raise speed limits in the first place. He's not going to be to
popular when he gets home.
|9.19.05 @ 4:08PM|#
Price controls are one of those emergency measures that should
only be in place for a limited time, like having the National Guard
patrol the streets. Meaning, it should only be enacted in response
to an emergency, not in response to the market price.
The idea of giving them a chance to work is doubly stupid - first,
for the market-distorting reasons everyone mentioned, and second,
because a law that takes some time to work is by definition
unsuited to deal with an emergency situation.
|9.19.05 @ 4:09PM|#
What exactly is the windfall tax that Dorgan is pushing? Taxes increase as the price goes up??? I don't quite understand that one.
|9.19.05 @ 4:14PM|#
joe-
Do you mean something like the rate of increase should be
controlled, for example, you can only raise the price $0.10 a day,
instead of the actual price?
|9.19.05 @ 4:16PM|#
A tax on "excess" profits, Yogi. You know, when the evil capitalists get more then their "fair share." When the "average Joe" takes it on the chin so the "fat cats" can buy bigger "McMansions." Jeez, where ya' been the last hundred years?
|9.19.05 @ 4:19PM|#
What exactly is the windfall tax that Dorgan is
pushing?
If limited supply forces the price up well above the marginal cost,
the people who control the limited supply reap higher than market
profits.
Some people look at that situation and say, "Now it will be
profitable to add supply that comes into play only at the higher
marginal cost of production."
Politicians look at that situation and say, "Now I can look good to
my constituents by beating up on rich and mean corporations. Why,
yes, these are the same corporations we just passed an Energy Bill
to give ridiculous tax breaks and subsidies to. Do you have a
point?"
|9.19.05 @ 4:37PM|#
If they keep this up, I just might have to dig out my W.I.N. buttons. Ahhh, memories.
|9.19.05 @ 4:42PM|#
That was an alley-oop. I tossed the ball up and t did a
brilliant slam-dunk (he's tall enough to do the real thing).
Yeah, t, and in a hundred years they will add "God" to your pledge
to stick it to those commie bastards.
R C Dean|9.19.05 @ 4:57PM|#
Sen. Byron Dorgan, D-N.D., for instance, will introduce
legislation today that would impose a windfall profit tax that
would hit oil companies when the price of crude tops $40 a barrel.
[...]
Yeah, because nothing lowers prices to the end user like raising
taxes on the producer.
I can't remember the last time I heard a Senator say something that
wasn't irredeemably stupid.
|9.19.05 @ 5:04PM|#
Yogi,
I don't know. I don't even know if there IS a situation when price
controls on gasoline would be a good idea, even for a limited
time.
I'm just saying, in general, emergency powers need to be quick to
take effect, address a short term problem, and have a short
sunset.
fyodor|9.19.05 @ 5:10PM|#
I don't even know if there IS a situation when price
controls on gasoline would be a good idea, even for a limited
time.
Wow, is this the same joe who kept hammering on us that lives were
at stake when we tried to describe the market-distorting
consequences of so-called anti-gouging laws would have in
NOLA?
joe, maybe you should go forth and preach the word among your own
kind! They obviously don't agree with you, and they aren't likely
to listen to us!!
|9.19.05 @ 5:38PM|#
So Senator Monkey sees what happens in HI and thinks it's a good idea that needs to be done "right." I'm thinking someone needs to get their nose out of the filler neck and stop sniffin' the gas fumes before making policy.
|9.19.05 @ 6:04PM|#
OK, anti-gouging laws in the first few days after a major disaster would probably be the type of situation that might warrant price controls.
|9.19.05 @ 6:07PM|#
Thoreau,
I'm not sure what scares me more:
How slick your post was, or how fast you came up with it.
Paul
fyodor|9.19.05 @ 6:18PM|#
OK, anti-gouging laws in the first few days after a major
disaster would probably be the type of situation that might warrant
price controls.
Oh well, I shoulda known it couldn't last. But still, go tell your
liberal brethren that the market is real and that price controls
don't serve their intended purpose! Lead a crusade, joe, you're the
only one they'll believe!!!!
|9.19.05 @ 6:28PM|#
Joe,
Higher prices, especially in the aftermath of a disaster, are a
natural economizer of scarce goods. Unless it's an immediate
life-and-death issue, then higher prices have secondary positive
effects.
Cicero posted this Walter Williams quote at To The People, but it's
what I'm referring to:
"Here's a which-is-better question for you. Suppose a hotel
room rented for $79 a night prior to Hurricane Katrina's
devastation. Based on that price, an evacuating family of four
might rent two adjoining rooms. When they arrive at the hotel, they
find the rooms rent for $200; they decide to make do with one room.
In my book, that's wonderful. The family voluntarily opted to make
a room available for another family who had to evacuate or whose
home was destroyed. Demagogues will call this price-gouging, but I
ask you, which is preferable: a room available at $200 or a room
unavailable at $79? Rising prices get people to voluntarily
economize on goods and services rendered scarcer by the
disaster."
One could say the same about gasoline, Joe. Let's say that a family
needed 8 gallons of gasoline to be able to drive to a relative's
house, and their car held 20 gallons. If gas was $1.75/gallon, then
they could fill up their tank for under $40, not exactly breaking
the bank...and then they have all that excess gas. But what if gas
went up to $5/gallon. Then, suddenly, filling up their tank costs
$100. So, maybe they only get 10 gallons, and leave the rest for
people who really need it. Natural, voluntary economizing.
Your idea about price caps after disasters would be valid only if
there was no scarcity of gasoline, and no scarcity in available
pumps to deliver the gasoline to customers efficiently, or,
alternately, if there was an immediate life-and-death
situation that depended on cheap gas right then.
Read Williams'
entire column for more on the advantage of rising prices on
scarce items.
|9.19.05 @ 7:25PM|#
It reminds me of a time in Texas when people had bumper stickers that read, "Drive 75 and let the bastards freeze in the dark." Ahh the 70's.
|9.19.05 @ 7:57PM|#
Unfortunately, Evan, they economize by wealth, not need. Which is ok for large screen tvs and top shelf scotch, but the gas people need to keep their generators running until wholesale deliveries start again? I think you'll get better results with a combination of price controls and hard sales caps. Again, only for a limited time in an emergency.
|9.19.05 @ 9:07PM|#
Wouldn't "price gouging" keep people from using the gas up on stupid shit before those wholesale deliveries started again?
|9.19.05 @ 9:22PM|#
With their sugar cane, they should run their cars on ethanol and burn bagass for their electricity.
Rick Gaber|9.19.05 @ 9:49PM|#
Find links to columns about so-called "price gouging" in
emergencies by Walter Williams, John Stossel, Sheldon Richman, John
Lott and Sonya Jones, Dimitri Vassilaros, Frank Bubb, and a funny
one by Don Lloyd HERE:
http://FreedomKeys.com/pricecontrols9.htm#gouging
|9.19.05 @ 10:42PM|#
"Wouldn't "price gouging" keep people from using the gas up on
stupid shit before those wholesale deliveries started again?"
It would also keep a lot of people from using it for necessary
shit.
|9.19.05 @ 11:12PM|#
I would like to mention that I wrote my own piece on SOLOHq (I
noticed the TOC link, so I thought maybe Objectivism will come back
on this board)...here's the link:
http://solohq.com/Articles/Druckenmiller/Price_Gouging_A_Myth.shtml
post|9.19.05 @ 11:23PM|#
Is it unusual for Hawaii's gas prices to be higher than the rest of the country's?
|9.20.05 @ 7:48AM|#
joe,
It would also keep a lot of people from using it for necessary
shit.
Please be more specific and give us some real world, historical
examples.
MP|9.20.05 @ 9:04AM|#
Please be more specific and give us some real world,
historical examples.
I'll bite, albeit with a hypothetical. I'm a gas station owner.
Disaster strikes. My supplies will are going to be severely
curtailed. My remaining inventory is now much more valuable. I
elect to sell it to the highest bidder. If I'm resupplied at a much
reduced rate, my new supply will also be highly valuable (although
much of this value is likely now priced into my wholesale cost).
Thus, as a good businessman, I will continue to charge the highest
rate.
Now, any economist will tell you that in this situation, resources
have been allocated in the most efficient way and society's wants
have been maximized. However, any regular joe will tell you, that
poorer members of society, people who stuggled previously at the
old prices, will likely be priced out of the marketplace for an
item that many consider to be a necessity.
Does a price gouging law effectively help these poorer members?
Probably not, because the market distortions would likely offset
the "need balancing". For example, the poorer members could still
resell the fuel they buy at below market prices. We've simply,
quite awkwardly, deployed a redistribution mechanism, whereby the
profits of the business owner are redistributed to other members
(poor or rich) of society. Also, a "first come, first serve" regime
is not inherently more fair than a "means tested" regime.
Thus, although I see the gripe expressed by price gouging law
advocates, providing support for people of lesser means is likely
better accomplished via vouchers/cash grants rather than price
controls.
|9.20.05 @ 9:29AM|#
Joe,
"they economize by wealth, not need."
But you willingly ignore the white elephant in your argument: that
whether people economize by "wealth" (how much money they have) or
by "need" (how much they require an item), the result is exactly
the same: economization of goods/services. Furthermore, "wealth"
economizing and "needs" economizing are not mutually exclusive, or
even that far apart. And, unless you're fabulously wealthy, you
don't really like to get "gouged", as you call it---so people, MOST
people, regardless of wealth, pare their purchases down to the
necessary minimum, or close to it, relative to their current funds.
I know you see certain people having more money than others as some
sort of great injustice that is to be solved by government fiat,
but this is no excuse for foolish price controls.
"Which is ok for large screen tvs and top shelf scotch, but the
gas people need to keep their generators running until wholesale
deliveries start again? I think you'll get better results with a
combination of price controls and hard sales caps."
You just shot your argument in the foot. How is someone supposed to
"keep their generators running until wholesale deliveries start
again", if there is a "hard sales cap" on how much gas they can
buy?
"It would also keep a lot of people from using it for necessary
shit."
Firstm define "necessary". Is it really wise to put the task of
defining "necessary", both in substance and quantity, to the
government? Even in times of emergency, it is incredibly foolish to
let a central authority determine what is necessary, and how much
of it is necessary. Everyone, EVERYONE, has different NEEDS, so a
centralized, one-size-fits-all declaration of necessity is
inherently flawed, no matter how good the intentions are,
no matter how well-though-out the planning is, it's still
centralized planning.
Let's use your generator example as an example here: let's say
there are two people with backup generators in their house. Power
is out for days following a disaster. So, the government determines
that gas should be sold at wholesale cost plus 10%, whatever that
is. And, you can only buy 5 gallons per day.
So, you are a late-twenties, healthy young man, without any serious
ailments or special needs. But you want to run your generator. 5
gallons of gas will run your generator for 16 hours per day.
However, your next door neighbor also has a generator, but they are
on oxygen and other electrically-powered medical support systems in
their home. They need that electricity much more than you do,
obviously---but, the government has declared that gas is just as
"necessary" to you as it is to them.
This is an extreme example, there are many less-extreme, but still
valid, examples. But it perfectly illustrates the problem with
universally defining "necessity", at the point of a gun, among a
vast, diverse population with vast, diverse needs.
|9.20.05 @ 10:10AM|#
"Economization of goods and services" is accomplished, in this
case, by denying them to the people who need them the most. For an
individualist, Evan, you certainly are eager to look at economic
issues in the collective aggregate, and ignore the details. In a
situation of limited supply, somebody is going to end up with less
than they want. I do not accept your premise that it doesn't matter
who ends up with less; nor your premise that the personal wealth of
each person in the disaster area is an effective way to prioritize
the best way to distribute the limited goods.
"How is someone supposed to "keep their generators running until
wholesale deliveries start again", if there is a "hard sales cap"
on how much gas they can buy?" By buying just enough gas to keep
the generators running for a few days. They buy some, but no one is
allowed to stock way up. I didn't think the concept of "enough, but
not too much" would be so alien. Oh, wait, this is Reason...
"Even in times of emergency, it is incredibly foolish to let a
central authority determine what is necessary, and how much of it
is necessary. Everyone, EVERYONE, has different NEEDS, so a
centralized, one-size-fits-all declaration of necessity is
inherently flawed, no matter how good the intentions are, no matter
how well-though-out the planning is, it's still centralized
planning." Is this part where I cross myself three times, or where
I say "Thanks be to God?"
'Firstm define "necessary".' That which in needed to provide the
necesseties of life.
"So, you are a late-twenties, healthy young man, without any
serious ailments or special needs. But you want to run your
generator. 5 gallons of gas will run your generator for 16 hours
per day. However, your next door neighbor also has a generator, but
they are on oxygen and other electrically-powered medical support
systems in their home" Under this situation, a late 20s, healthy
young man should not be allowed to hoard gas, and the elderly
people on a fixed income next door should not be left to die
because gas is too costly, or unavailable.
You, too, are endorsing a system in which the "needs" of some are
prioritized over those with greater needs - you are just basing
your choice on a criteria - wealth - that has nothing to do with
maximizing good and avoiding harm.
|9.20.05 @ 10:55AM|#
"Economization of goods and services" is accomplished, in
this case, by denying them to the people who need them the
most.
Most certainly not true, Joe. How did you come to that conclusion?
Who needs them "the most"? Why? And How are they also the very ones
that are denied the products?
For an individualist, Evan, you certainly are eager to look at
economic issues in the collective aggregate, and ignore the
details.
No, you just misunderstand what I'm saying. I may be an
individualist, Joe, but that doesn't mean that I must ignore the
"aggregate" effects of a market solution versus that of a
government solution. Exactly what details am I ignoring?
In a situation of limited supply, somebody is going to end up
with less than they want. I do not accept your premise that it
doesn't matter who ends up with less
I never said it didn't matter; in fact, I spent two paragraphs
talking about why it DID matter! What I said is that the
market is better (not perfect, better) than
one-size-fits-all government fiat, at dealing with a vast set of
diverse needs. Obviously, there is no way to make absolutely sure
that everyone gets only that which is proportional to their
"needs", but certainly, declaring that one can only purchase X
gallons of gas per day is a surefire way to make sure that there is
a vast inequity in needs being met.
"By buying just enough gas to keep the generators running for a
few days. They buy some, but no one is allowed to stock way up. I
didn't think the concept of "enough, but not too much" would be so
alien. Oh, wait, this is Reason..."
Again, you triumphantly defy logic and reason. Joe, please,
explaineth to me who gets to define "enough, but not too much".
What criteria is used? How can "enough, but not too much" be the
same for two million people, all with different needs? "Enough" is
situation-dependent, so how can a one-size-fits-all decree possibly
ever satisfy anyone but those few which it happens to meet?
Also, you say they could just buy enough gas to power the
generators for a few days. Well, what if the supplies were really
low...and in order to make sure everyone had the equal amount, the
government had to put the sales cap at a level that didn't allow
them to purchase enough to power their generators for more than 12
hours per day?
'Firstm define "necessary".' That which in needed to provide
the necesseties of life.
Okay, Joe, again, how can a universal, absolute definition possibly
ever satisfy the "necessities of life" for millions of people. Gas
might be a "necessity of life" for someone whose life support
equipment needs their generator---but not for me, who can walk to
work and is perfectly healthy.
In other words, "that which is needed to provide the necesseties of
life" differs from person to person, both in substance and
quantity. Therefore, it is absurd to make a centralized,
one-size-fits-all decree about what and how much is "needed to
provide the necessities of life" for everyone and anyone.
Since you have trouble understanding this simple concept, allow me
to illustrate it with another simple example: Let's say that I need
1 bottle of water and 2 cans of tuna to survive each day. You
require 1.75 bottles of water, 3 cans of tuna, and a candy bar (for
the sugar) to survive each day. Our sick neighbor, Mike, requires 3
bottles of water, 5 cans of tuna, and 12 candy bars.
So, what kind of sales caps does the government put on canned tuna?
Water? Candy bars? With nearly any decision you make, some will
have too much, others will have too little. And because prices are
kept so low, those who need just a little will buy more than they
need, and then, possibly, sell it at an inflated price to those who
need more than the maximum amount allowed. Price caps and sales
caps simply do not allow for variations in needs---but
needs variation is vast, complicated, and undeniable.
Yet, you think it can all be solved by the government making a
central decision. Right.
"Under this situation, a late 20s, healthy young man should not
be allowed to hoard gas, and the elderly people on a fixed income
next door should not be left to die because gas is too costly, or
unavailable."
But, with price and sales caps, that WOULD be allowed---that's my
point, Joe. Your solution, if obeyed, would cause that precise
situation to arise...unless you suspended the law on a case-by-case
basis, which defeats the purpose of a law to begin with, and would
also be nearly impossible on a scale such as what we're dealing
with.
You, too, are endorsing a system in which the "needs" of some
are prioritized over those with greater needs - you are just basing
your choice on a criteria - wealth - that has nothing to do with
maximizing good and avoiding harm.
Yeah, Joe, that's just what I'm doing, saying that rich people
should get everything and poor people should just suffer. I'm
sorry, but, if you think that the market is that cut-and-dried,
you're just being silly. I'm prioritizing, yes: in a situation in
which goods are scarce, it is better to have expensive goods than
no goods at all. And by raising the price, you discourage most
people from buying more than they need, and thus, helping
to ensure that more goods remain in stock.
Can you point me to one instance where there was no price or sales
controls after a disaster, and the rich folks came in, bought
everything out...but the poor people couldn't afford it, and died
as a result?
|9.20.05 @ 1:46PM|#
"How did you come to that conclusion?" By observing the
differences between those who could get out of the way of Katrina
and those who could not, for example, and the remarkable
correlation between those groups and wealth?
'Who needs them "the most"?' That depends on the goods and services
in question. Diabetics need power to keep their insulin cold, more
than wealthy, healthy people need power to keep their beers cold,
for example. With these traits, there is no correlation between
need, and the ability to afford jacked up gasoline.
"Why?" Why what?
"And How are they also the very ones that are denied the products?"
Those with the greatest need after a catastrophe will be, for the
most part, those who had the fewest resources to prepare for it or
escape.
"Exactly what details am I ignoring?" You are ignoring the fact
that "economizing" based on price does not achieve the most
important goals - getting the goods and services to those need them
most.
"What I said is that the market is better (not perfect, better)
than one-size-fits-all government fiat, at dealing with a vast set
of diverse needs." Yes, and you did so by assuming that the
capacity to pay for expensive goods is an effective measure of the
need to acquire those goods, which is a demonstrably false
premise.
"How can "enough, but not too much" be the same for two million
people, all with different needs?" It's not, it's an approximation,
carried out in emergency circumstances, based on what is likely to
be needed. Like every other example of emergency relief ever
dreamed up. Anyways, it is a far better approximation than "if you
can't afford it, you must not need it."
"Since you have trouble understanding this simple concept, allow me
to illustrate it with another simple example" Since you have
trouble understanding that your mother's had more cocks than Frank
Purdue, I'll illustrate it by pointing out that her nickname is
"Feathers." If you want to keep things civil, we can do that,
too.
"I'm prioritizing, yes: in a situation in which goods are scarce,
it is better to have expensive goods than no goods at all. And by
raising the price, you discourage most people from buying more than
they need, and thus, helping to ensure that more goods remain in
stock." 1) I've already stipulated that price controls require
maximum purchase limits. 2) I've already stipulated that such
measures need to be phased out quickly, so that market pricing is
back to driving pricing in time for new goods to arrive.
"Can you point me to one instance where there was no price or sales
controls after a disaster, and the rich folks came in, bought
everything out...but the poor people couldn't afford it, and died
as a result?" I can think of no examples of a post-disaster
scenario when extra-market interventions were not used to assure an
adequate distribution of essentials, so no.
|9.20.05 @ 2:37PM|#
1) I've already stipulated that price controls require
maximum purchase limits. 2) I've already stipulated that such
measures need to be phased out quickly, so that market pricing is
back to driving pricing in time for new goods to arrive.
joe, I think you are underestimating the plain old practical
impossibility of any government control doing anywhere close to as
good a job in a disaster situation as distributed markets
would.
First, you say that these price controls will come and go very
quickly. As evidenced at all levels this last time, governments
move very slowly in a disaster.
Second, there's the well known problem of planned economies being
unable to match up supply and demand at all. How are government
bodies supposed to determine in any amount of time the supply and
supply lines available and how much each person or cooperative
needs for all the possible necessary products?
Finally, in order to distribute this government imposed order
thoughout the land, you'll have to deputize a great number of
people to decide the prices and limits and enforce them. That's an
awful lot of people with an awful lot of power in an already tense
situation.
It's hard to imagine all that playing out as anything other than a
disaster on top of a disaster.
|9.20.05 @ 5:17PM|#
"joe, I think you are underestimating the plain old practical
impossibility of any government control doing anywhere close to as
good a job in a disaster situation as distributed markets
would."
...as it was in the beginning, is now, and ever shall be, world
without end, amen.
"First, you say that these price controls will come and go very
quickly. As evidenced at all levels this last time, governments
move very slowly in a disaster." As a matter of fact, some elements
of the government, such as the Coast Guard, acted very quickly and
effectively. And restrictions on the relatively small universe of
retail operations in a defined area will be relatively easy to
enforce.
"Second, there's the well known problem of planned economies being
unable to match up supply and demand at all." This is a very good
argument against government management of the economy overall.
However, in an emergency situation, the market isn't functioning
properly anyway. Nature is imposing its own distortions. In the
long run, recall, we're all dead.
"Finally, in order to distribute this government imposed order
thoughout the land, you'll have to deputize a great number of
people to decide the prices and limits and enforce them." No, not
really. Prices and amounts are set for a relatively small number of
items, and the flood of law enforcement and security personnel that
patrol the streets to keep order are made aware of the anti-gouging
laws as well.
"It's hard to imagine all that playing out as anything other than a
disaster on top of a disaster." As a matter of fact, short term
anti-gouging laws have already been implemented during the natural
disasters that have occured for years now. I was earlier asked to
"name one" example of a situation, and pointed out that the
background had never occured. I'm going to turn it around on you -
can you name a single time that the anti-gouging rules enforced
after a disaster have caused a disaster in this country?
|9.20.05 @ 6:32PM|#
can you name a single time that the anti-gouging rules
enforced after a disaster have caused a disaster in this
country?
The anti-gouging laws that usually come into play in this country
are (1) longer term than you are thinking of and (2) based on
prices prior to the shock. And as far as I am aware, none of them
try to ration any essential good -- a key feature of the plan you
imagine. As such, the current laws pretty much run themselves, with
the prosecutors cleaning up the ruins afterwards for whatever gain
they can get while the lost opportunities for increased supply are
entirely forgotten.
Current mechanisms for anti-gouging are designed to make sure that
no one looks like they're getting rich while the shelves get
cleaned out and not restocked.
The mechanisms you describe above -- including anti-hoarding
provisions -- would require quite a bit more foresight and control
from the government. No, I have no examples -- failure or success
-- where these were tried short term after a disaster.
|9.20.05 @ 7:06PM|#
Mike has a good point. Joe, the sort of price controls you talk
about are, well, rational. Economic martial law, so to
speak. Stuff to be used on the order of days, not several
weeks.
On the other hand, the anti-gouging laws and price controls we
actually see last much longer than you'd countenance, and tend to
be applied into the reconstruction of a damaged area,
discouraging carpenters and such in neighboring regions from coming
into the area to make a buck (or, looking at it another way,
justifying the costs of going to help people).
Hmm, trying to limit the reconstruction business to local companies
in such cases...would it be too cynical of me to consider
that the goal, not preventing "gouging"?
Site comments/questions:
Media Inquiries and Reprint Permissions:
(310) 367-6109
Editorial & Production Offices:
3415 S. Sepulveda Blvd.
Suite 400
Los Angeles, CA 90034
(310) 391-2245