What Would Have Occurred if NY and NJ Allowed Gas Prices to Climb after Hurricane Sandy
A great analysis by Robert Murphy, especially the second half which explains how different things would have been under free market prices. A must view.
Also, if gas stations know that market prices will be allowed, they will do more in the way of having generators, installing more gas pumps, whatever is necessary to be able to sell the gas, when the emergency hits.
I would have also mentioned that prices naturally go up and down in response to competition, where gas stations near to each other adjust their prices based on what their competitors are charging. "Gouging" is not possible because if you have competition and try to raise your prices to be higher than the market price, people will buy from your competitors instead.
This seems very obvious to me, but apparently I am in a tiny minority of those that know this. It seems most people naturally assume that government price controls are called for and beneficial. I don't understand how people have trouble understanding this, even the "Joe Sixpack" crowd.
its obvious that this rich man is in bed with the oil corporations, he probably would make millions, if not billions, if the great christie and bloomberg would allow oil corporations to rip off we the people even more.
gouging is a crime for a reason.
these plans have proven to be a great success! it keeps the prices down, prevents oil companies from stealing even more of our money and taking advantage of these poor people at the expense of ballooning CEO salaries, and it allows everyone an equal chance to get gas. we are all equals, remember?
you just want to rip off the people for your own benefit, isnt that how you got rich in the first place? pure greed.
i cant wait for Obama to end the bush tax cuts and raise capital gains taxes so we the people can take back this country and fix the economy
Dear anonymous, you should take your own advice and quit hoarding all the stupidity. You managed to cram just about every possible dumb-ass thing that could be said on this topic into a few paragraphs. Now there is nothing left for other trolls to showcase their doorknob-level thinking skills.
The profit motive. It's so f'(<!ng simple! Look at the Craigslist people selling at $10 for a gallon.
Love this.
The fact that the government has destroyed (via public schools) the ability of the average person to see this makes me worry about the future of this country.
I think state level secession is the only remedy. I'm trying (and slowly convincing) my family to relocate to Columbia or Costa Rica, and after Obama's re-election they are MUCH more receptive.
Bob Murphy is great at explaining basic economic things. What baffles me is that this isn't obvious to every one. Are Bloomberg and Christie really this stupid? Or they not care about doing good at all and just do whatever makes them feel powerful?
Hmmm, Murphy's point about gas stations increasing their holdings before a storm if they had reason to believe it would be profitable absent possible price controls raises a question. Why didn't individuals increase their holding of gas, (ie fill their tanks) before the storm, since it would be reasonable to assume either there would be shortages of gas or higher prices?
Also, if gas stations know that market prices will be allowed, they will do more in the way of having generators, installing more gas pumps, whatever is necessary to be able to sell the gas, when the emergency hits.
ReplyDeleteI would have also mentioned that prices naturally go up and down in response to competition, where gas stations near to each other adjust their prices based on what their competitors are charging. "Gouging" is not possible because if you have competition and try to raise your prices to be higher than the market price, people will buy from your competitors instead.
This seems very obvious to me, but apparently I am in a tiny minority of those that know this. It seems most people naturally assume that government price controls are called for and beneficial. I don't understand how people have trouble understanding this, even the "Joe Sixpack" crowd.
If the 10 gas stations open sell at $4/gal and one station sells at $10/gal, where will people that value time over waiting go?
DeleteThat's the freaking market! Politicians are evil
I just emailed the link to lots of folks who need to see it. Talk about a quick crash course in Econ!!!!
ReplyDeleteThe Murph is amazing!!!
its obvious that this rich man is in bed with the oil corporations, he probably would make millions, if not billions, if the great christie and bloomberg would allow oil corporations to rip off we the people even more.
ReplyDeletegouging is a crime for a reason.
these plans have proven to be a great success! it keeps the prices down, prevents oil companies from stealing even more of our money and taking advantage of these poor people at the expense of ballooning CEO salaries, and it allows everyone an equal chance to get gas. we are all equals, remember?
you just want to rip off the people for your own benefit, isnt that how you got rich in the first place? pure greed.
i cant wait for Obama to end the bush tax cuts and raise capital gains taxes so we the people can take back this country and fix the economy
Dear anonymous, you should take your own advice and quit hoarding all the stupidity. You managed to cram just about every possible dumb-ass thing that could be said on this topic into a few paragraphs. Now there is nothing left for other trolls to showcase their doorknob-level thinking skills.
DeleteThe profit motive. It's so f'(<!ng simple! Look at the Craigslist people selling at $10 for a gallon.
ReplyDeleteLove this.
The fact that the government has destroyed (via public schools) the ability of the average person to see this makes me worry about the future of this country.
I think state level secession is the only remedy. I'm trying (and slowly convincing) my family to relocate to Columbia or Costa Rica, and after Obama's re-election they are MUCH more receptive.
After reading the comment from Anonymous, I was convinced this was satire. I kept expecting to see The Onion logo at the end. What a hoot!
ReplyDeleteBob Murphy is great at explaining basic economic things. What baffles me is that this isn't obvious to every one. Are Bloomberg and Christie really this stupid? Or they not care about doing good at all and just do whatever makes them feel powerful?
ReplyDeleteHmmm, Murphy's point about gas stations increasing their holdings before a storm if they had reason to believe it would be profitable absent possible price controls raises a question. Why didn't individuals increase their holding of gas, (ie fill their tanks) before the storm, since it would be reasonable to assume either there would be shortages of gas or higher prices?
ReplyDeleteI've posted a simple graphic illustrating the same principle here: http://www.mattbeaven.com/2012/11/09/the-failure-of-price-controls/
ReplyDelete