“The American people will never knowingly adopt Socialism. But under the name of ‘liberalism’ they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened.”

Socialist Party presidential candidate Norman Thomas

Monday, November 05, 2012

Price gouging is good after disasters

In the aftermath of hurricane Sandy, the short-sighted governors of New Jersey and New York made thoughtless, reflexive decisions regarding the gas shortages in their respective states. They instituted rationing, price controls, and limited purchases because economically stupid Americans(most of us) think that artificially keeping prices low helps people in crisis.....it doesn't. Our friends over at Reason.com explain why.....


That's exactly right. By making it illegal for prices to rise during high demand times as they normally would, Gov's Cuomo and Christie have removed the incentive for gas producers from other states to import gas to those high-demand areas, and you end up with chaos and violence as we're witnessing.

The fact that those "entrepreneurs" are buying artificially cheap gas and then selling it for $50/gallon demonstrates that government meddling in the gas market during a crisis is the exact wrong thing to do.
But dumb Americans don't understand the market, nor do they want the freedom of open markets. They only want government to take care of them.

What a pathetic country it is whose citizens thing that price controls are good.


david said...

This is so easy but when I try to explain this to people you'd think I had horns sprouting from my head. People who can't or don't understand this will cast their votes today with the same mirror-fogging mouth breathing.

Ed said...

Economic ignorance on the part of the electorate might be the single biggest contributor to the pitiful state in which the nation finds itself.

Isaac A. Nussbaum said...

Just one more reason why democracies all eventually decline and fail and why the good ole' US of A is near the end of its run as bull goose. (From Jack Nicholson's line in "One Flew Over the Cuckoo's Nest", when Randall first reports to Nurse Ratched's ward.)

Ed said...

America will recede to become just another garden variety nanny-state like old Europe. China will establish its hegemony this century and America will fall prostrate before its new Asian master. I'm glad I'll be dead by then, but my kids will live to see it.....I owe them better.