How Are Those Groovy Price Controls Working Out, Hawaii?
Matt Welch | September 19, 2005, 2:58pm
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.
Evan Williams | September 20, 2005, 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.
joe | September 20, 2005, 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.
Evan Williams | September 20, 2005, 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?
joe | September 20, 2005, 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.
joe | September 20, 2005, 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?
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