Posted on 11/03/2012 1:55:01 PM PDT by sickoflibs
In New Jersey there is a shortage of open gasoline stations not because of the supply of gas but due to lack electricity at gas stations. This has caused long lines due to form miles long and lots of frustration. The media is reported thousands standing in line waiting to buy gasoline.
So NJ Gov Chris Christie has just announced a form of gasoline rationing of odd and even buying days. At the same time he is prosecuting merchants for raising prices in response to the shortages; and I am sure this is very popular there: ' Procecute those greedy capitalists because price gouging is unfair' I can imagine them saying.
But suppose gas stations and stores selling generators were allowed to raise their prices legally. Wouldn’t that not only reduce demand some but more importantly wouldn't it bring in a greater supply of generators from other parts of the country to NJ? I mean would you stop your life to buy up generators and drive them to ravaged NJ just to risk prosecution?
Would you rather buy more expensive gasoline, or have NO gasoline being sold to you if you are out of it?
The first time I read Thomas Sowell was about 1991 in the NY Post and he made this exact argument. I have tried it a few times a few times with real people and it always provokes anger. The rule seems to be that ‘fairness trumps effectiveness’.
Yet not one of those who got mad (generally libs or RINOs) ever suspended their own lives to buy supplies and bring them to hurricane ravaged areas. They just sit home comfortably and bask in their warm smugness of being for 'fairness'. Rationing+price controls=fairness
Three linked sources below :
According to AAA, 60 percent of the gas stations in New Jersey and 70 percent on New York's Long Island are closed. That isn't a result of gas shortages, but rather because electricity in the area is spotty and gas pumps require power to operate.
In New Jersey, about 100 consumers have called the attorney general’s office to complain. There are reports of gas stations raising prices by as much as 30 percent in a day and hardware stores charging twice as much for electric generators as they did before Sandy.
That would put merchants in violation of the state's anti-gouging law, which bars price hikes of more than 10 percent in an emergency. New Jersey's law is unusual in that sets a specific price increase threshold in defining gouging. Of the 30 states that have such laws, only seven set a specific level of increase — either 10 percent or 25 percent — that constitutes gouging.
After Sandy, allegations of price gouging (CBS News MoneyWatch November 2, 2012)
TRENTON, N.J. — Motorists in 12 northern New Jersey counties will be allowed to buy gasoline just every other day under an order by Gov. Chris Christie .
Gas lines were long at some gas stations Saturday morning with motorists trying to make purchases before the noon switch to a gas rationing system.
Drivers with license plates ending in an even number will be allowed to buy gas on even-numbered days, and those with plates ending in an odd number can make gas purchases on odd-numbered days.
Christie hopes the rationing will ease long wait times at gas stations and prevent a fuel shortage in the state hard-hit by Superstorm Sandy
Chris Christie Orders Gas Rationing In Some Counties (11/03/12 AOL News@Huff Post)
The New Jersey Attorney General’s Office has brought charges against 65 businesses accused of price gouging in the aftermath of Sandy, the office announced Friday.
Gas stations, convenience stores, restaurants, hotels and stores selling emergency supplies such as generators were among the businesses charged. The businesses are located across the state, but the charges were concentrated in Bergen, Essex, Middlesex, Monmouth, Ocean, and Passaic Counties.
“Fuel, electricity, food, and a place to sleep are not luxuries, certainly not for individuals who have been displaced from their homes and in many cases have limited resources at their disposal,” Gov. Christie said in a statement.
N.J. cracks down on price gouging, ( Philly.com NOVEMBER 2, 2012)
The answer in our situation is a resounding NO.
Because existing supply is prepositioned in the consumer facing end of the supply chain.
Raising prices would create adverse incentives to the chains of gas integrated wholesalers/retailers and confederated station owners in the region.
And, given your beliefs about the free market, I suspect you'll be voting for Obama? After all, the free market is just people dealing with people for their mutual well-being.
We wouldn't want that would we.
It's just incredible the extent to which Marxism has permeated American conservatism.
Gouging is superior to hoarding.
Let the price rise to meet demand and you have a much better chance of more people getting what they need instead of what they want.
Thanks
This is exactly the one I was thinking of. Allowing gas station owners to charge what buyers are willing to pay, rather than the lower price that the state dictates, could provide a strong incentive to bring in generators to power more gas stations getting more people gas and slowly lowering the prices again as more come on line.
The way it is now station owners might as well just close early with these rules leaving consumers with nothing for standing in line.
But fairness trumps practical economics when the elected gubment decides.
Are you trying to claim that communism didn't work? North Koreans are the happiest people in the world. Life is fair there. No gouging there.
So NJ Gov Chris Christie has just announced a form of gasoline rationing of odd and even buying days. At the same time he is prosecuting merchants for raising prices in response to the shortages; and I am sure this is very popular there: ‘ Proscecute those greedy capitalists because price gouging is unfair’ I can imagine them saying.
Under the circumstances, could you blame a station owner who just shuts down to avoid the hassle?
You’re close, but wrong. High prices send a market signal and cure themselves through arbitrage or repairing the supply/demand shock.
Government regulations on gas blends limit the ability to shift gasoline, but price flexibility, desparaginly called “price gouging”, acts as a clarifier both for supply and demand.
Imagine the situation where a butcher has thousands of dollars worth of meat at meat at steak v. the person who wants to keep the television and refrigerator running. At $15/gal the market will clear only for those who need it most. If both of the above face the same pricing then their is a mismatch because the market clearing price is obviously higher. The people who need it least get too much and the people who need it most get to little. Supply remains the same because potential suppliers don’t gain anything by entering the market.
See this example from NC: http://www.econlib.org/library/Columns/y2007/Mungergouging.html
Price gouging laws are stupid and high prices cure themselves.
I can agree with the rationing. The price control is BS unless you can protect the station from huge increases in his next delivery. I would personally shut the business until the gov gets out of the way
Rationing+price controls = empty shelves, gas lines, uniform despair = fairness
Fairness is a word I have come to despise in the last four years. No one ever mislead me to expect fairness in life. Anyone who does is delusional
NJ also has that law that you are not allowed to pump your own gas, you must wait for an attendant.
I’m sure those union twits are really doing yeomans duty in pumping that gas too/s
Businesses price gouging people will experience the opposite effect - forever.
How do you define “price gouging”? I say it’s mine and it’s not for sale. You want it at any price, should I be forced to sell it at your price or not sell it at all if it’s not what I would take?
Businesses price gouging people will experience the opposite effect - forever.
How do you define “price gouging”? I say it’s mine and it’s not for sale. You want it at any price, should I be forced to sell it at your price or not sell it at all if it’s not what I would take?
Christie’s channeling Carter or maybe Obama rubbed off on him. These stupid Eastern Publicans.
Gouging is superior to hoarding.
Don’t doubt the jerks who are hoarding too. That is one reason that rationing is not a bad move.If you want to hoard, do it before the disaster
I guess that went out the door really quick after this storm.
Don’t bet on it. That’s probably what had the lines so long
Dear libertarian figment of Ayn Rand’s imagination. You are not “forced” to sell anything. You can show everyone and close down during a disaster. Republican and Demonrat States forbid price gouging. Why? Because they don’t want businesses burned and looted. They are not darwinists.
Just so you know, price gouging is raising your profit margins on items beyond what is your profit margins were prior to the disaster. So if the widgets cost you more than before the disaster, you can charge more.
During a disaster, business owners who are quick in getting going again, make lots more business in volume of sales. So in a way, they benefit in profit from a disaster without taking advantage of people’s suffering and ripping everyone off.
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