FROM ECONOMIST JUSTIN WOLFERS:
The problem is we have two equilibria:
1. Normal times: Everyone believes there will be toilet papers so no-one stockpiles.
2. Panic times: Everyone fears shortages, which leads them to stockpile, which creates shortages.
Here’s how we solve the self-fulfilling panics that cause bank runs:
1. The FDIC insures your money, so even if everyone else is running to the bank, you don’t have to try to beat them.
2. Lender of last resort: The Fed lends to banks facing these runs, so they can keep operating.
All of this says that what we need right now is a government-backed Strategic Toilet Paper Reserve.
That Reserve makes a promise that even if your local Costco an out, you still have the right to buy 2 rolls per week from the government’s stockpile.
The Strategic Toilet Paper Reserve removes the incentive to stockpile. It ensures that even if you see others running to the store to stockpile toilet paper, you no longer need to try to run to beat them. You can relax, knowing that you’ll still be able to wipe your bum.
“....All of this says that what we need right now is a government-backed Strategic Toilet Paper Reserve....”
LMAO.... “The Creature from Heckel & Jeckel’s Toilet Bowel”