Saturday, November 17, 2012

Amazing, Absolutely Amazing

WSJ has an article on the odd-even gas rationing put in place as a result of Hurricane Sandy: Does Odd-Even Rationing Work?

It begins (my highlight):

My print column examines mixed opinion from economists about the efficacy of odd-even rationing, a system put in place to reduce long waits at gas stations in the New York City metropolitan area after superstorm Sandy shut down some stations and cut the supply chain to others. The system, a reprisal of one used in some parts of the U.S. to deal with the shortage fueled by the oil embargo by Arab nations in the 1970s, allows cars with license plates whose last digit is even to refill on even-numbered dates, and odd plates on odd dates.
It then goes on to quote not economists, but a pollster, a transportation professor , a government spokesman, a systems engineer, a marketing professor, a statistician, another transportation official. a consumer research firm and a college lecturer in operations research.

Thus, in a column purporting to be about the views of economists, not one economist is quoted, good, bad or ugly. It barely identifies prices in the article and that they are at the heart of the shortage. In fact, prices are mentioned only once:
 Another possible solution would be to let prices move freely, but this is barred by anti-gouging laws — and political considerations.

Immediately, following this sentence is this doozy quote from the operations research lecturer, who has a degrees in public administration, business and systems engineering:

“Slightly less objectionable might be a temporary tax...At least then, the money would be going to the government who could use it to provide relief to those who cannot afford to pay high prices and even help with those suffering from the effects of the storm in general. "

Amazing, absolutely amazing. WSJ ignores the fundamental problem of price controls, almost completely, and goes into a discussion of technical manners of how the rationing should be implemented (when a call for higher taxes is not on the table).

There is no discussion at all about the incentive that would result by allowing suppliers to charge free market prices. Instead, the discussion starts at the point where the problems caused by the rationing and price controls are fully distorting the markets and the core problem is long forgotten.

I doubt you would find such a horrendous discussion even in an old Soviet central planning journal.


  1. Didn't Rothbard say something about everyone being an expert in economics even though they know nothing about it?

  2. Reason number 5,896,657 why I gave up reading the WSJ in favor of the EPJ

  3. I dunno why people think economists are boring (or even economics). The types questioned in the article are dull as anything.

  4. The author's opening line refers to his print article, "Fuel Rationing Is Hard to Gauge," published yesterday, in which he does quote an economist from GWU. I agree with you that he's asking the wrong questions and that his economic reasoning is clearly flawed, but your critique overlooks that he was refering to a past article.

    1. Even more idiotic. Why doesn't he quote the economist online?

    2. @Banacek: He does. He provides a link to the print article in the opening sentence of the article above. Look closer.