Posted on 09/01/2005 4:22:37 AM PDT by chronic_loser
Understanding economics has never been a requirement to be a politician. With gas prices reaching $70 per barrel on Monday and hotels outside of the disaster area raising rates, "price-gouging" seems to be politicians' favorite phrase these days. In the coming weeks, as people living in the disaster area try to get everything from fallen trees removed to food, the outcry against higher prices will only get worse. Yet, if political threats of price controls and price-gouging lawsuits prevent prices from rising now, it is the consumers who will suffer in the long run.
In Illinois on Monday, Democratic Gov. Rod Blagojevich started pressing to prosecute gas companies that profit from the recent price hikes brought on by the hurricane, and he is concerned that some of these increases occurred even before the hurricane hit the oil fields in the Gulf. In Hawaii on Sept. 1, the state government is supposed to begin imposing price controls on wholesale gasoline. Michigan, Oregon, California, New York and Connecticut have also debated regulating gas prices.
Even the Bush administration has gotten in on the act by having the Justice Department and the Federal Trade Commission look for evidence of price-gouging and believes retail and wholesale gasoline prices are "too high." Congress is planning on holding hearings on oil company "price-gouging."
In Texas, Attorney General Greg Abbott is threatening legal action against what he called "unconscionable pricing" by hotels that took advantage of desperate people fleeing the chaos in nearby Louisiana. In Alabama, Attorney General Troy King promises to vigorously prosecute businesses that significantly increase prices during the state of emergency.
You would think that people had learned their lessons about price controls during the 1970s, though memories have surely faded. Price controls didn't stop the cost of gasoline from rising. They just changed how we paid for them. Instead of prices rising until the amount people wanted equaled the amount available, chronic shortages of gasoline had Americans waiting in lines for hours. Yet, the supposedly permanent shortages disappeared instantly as soon as price controls were removed.
The free advice being offered by politicians is that it was improper for prices to start rising before Hurricane Katrina disrupted production in the Gulf of Mexico. But waiting to raise prices means that consumers will end up paying even higher prices when the reduced oil flow out of the Gulf is finally felt.
Higher prices today reduce consumption and increase inventories and thus reduce how much prices will rise tomorrow. The overall increase in price will actually be less.
The possibility of higher prices when disasters strike also gives oil companies an incentive to put aside more gas to cover those emergencies. Storing gas is costly, and if you want them to bear those costs, you had better compensate them. The irony is that letting the companies charge higher prices actually reduces customers total costs when you include such things as having to wait in long lines because there will be more gas available when the disaster strikes.
The American oil industry is no more concentrated when prices started rising immediately before Hurricane Katrina hit than it was two weeks earlier, and oil companies possess no sudden increase in monopoly power. Neither have they suddenly become greedier.
Stamping out "price-gouging" by hotels merely means that more of those fleeing the storm will be homeless. No one wants people to pay more for a hotel, but we all also want people to have some place to stay. As the price of hotel rooms rises, some may decide that they will share a room with others. Instead of a family getting one room for the kids and another for the parents, some will make do with having everyone in the same room. At high enough prices, friends or neighbors who can stay with each other will do so.
There is another downside to price regulations. Companies in states all across the country, hoping to make a few dollars, are thinking of loading up their trucks with food, water and generators and heading down to Louisiana, Mississippi and Alabama. The higher the prices, the faster these "greedy" companies and individuals will get their products down to desperate customers. But their greed means less suffering. The more products delivered, the less prices will rise. Political grandstanding today means future disasters will turn out even worse.
What about the poor?
Making the companies pay for others' altruism not only creates the wrong incentives, it is also unfair. If we need to help out, make everyone pay.
Bashing companies may be profitable short-term political behavior, but the discomfort will be over far sooner and less severe if markets are left to their own devices.
Which has NOTHING to do with whether we are talking about socialism. If you want to VOLUNTARILY give, or even create a club where one of the REQUIREMENTS FOR VOLUNTARY MEMBERSHIP is to give, I am all for it. Don't try to dress up Acts 2 into some type of socialistic commune, though. The key word here is "VOLUNTARY." If you and I are walking down the street and see someone in need, and I open my wallet/life/resources to that person, THAT is charitable giving described in Acts. If I pull out a gun and demand that you fork over YOUR money so I can give to him because "you have enough already and you don't need more," then it is not compassion at all. It is theft. Worse, it is hypocritical theft because I am forcing you to do what I would not, so I can "feel " better about "caring about the poor." Finally, it is simply evil, because it is predicated on the idea that you should be punished (stripped of resources) for some idea I have about charity. Again, I commend you to live frugally, give generously, and conduct business honestly. That is the ONLY way to enjoy the material blessings in this life. Focusing on the "greed" of others simply makes one sour and resentful of their materialism, and make YOU just as much a materialist as the fattest self indulgent plutocrat on the planet. Charity is a matter between you and God, not society and the state.
So faced with one of two scenarios, one -- where the station sells at the regular price and runs out, and two -- where the station charges market rates ("gouging") and has an inventory on hand for just those emergencies, which do you prefer?
You're on the road this weekend and as your gas gauge moves toward empty, you pull off of the Interstate and up to the nearest gas station. One kept the normal price, is selling gas at $2.75 a gallon, but has sold out already and has signs on the pumps: "No Gas". The other raised his prices as his inventory got lower. He has gas, but is selling it at $5.25 a gallon. You are out of gas and can't make it to the next town. Which station is providing the better public service?
You're trying to say that God is confused, then? He's the one, IIRC, that said, "Thou shalt not steal" and even "thou shalt not covet". You mean he was confused? When Paul said that covetousness was idolatry, he was mistaken?
I don't think so. Where you go wrong is that the Bible commands me to look out for my fellow man--but nowhere does it authorize my fellow man to barge into my house and take what he (thinks he) needs.
They didn't do with the property what God had wanted and yet (which was worse than the actual shortfall) claimed that they had.
Reread it. The problem was that they lied. Peter is specifically telling them that (1) they were not required to sell their house, and (2) having sold it, they were not required to turn over every penny. What offended God was their decision to lie about their decision. IF they'd said, "Howdy Peter, we sold our house, and here's half the money," they'd have been just fine.
Some people would not even have shame held up to the gougers, the people who ride high on a crisis and then cloak themselves in the similitude of virtue for having done so.
I work the Williston Basin (ND, MT, SD) as a wellsite goeolgist, but have experience in WY (registered there), CO, NV and UT as well.
Vertical, directional and horizontal wells (mostly horizontals the last few years), in Carbonate (primarily), clastic, and fractured volcanic reservoirs.
She sent me e-mail this morning, though, that some jerk had gone around and bought up generators, then set up shop selling them for 3 times what he paid for them. Of course he was gone by the time the cops arrived.
I'm thinking kneecapping should be allowed for folks like that.
At the very most logical extreme you do not have any proof of that. I see Peter pointing out their participation in the transaction, not their "oh, I think I can choose any old thing and God is still pleased" right.
EEEP, what rhetoric! Mr. Zero Vetoes in Five Years, a new George Washington? Mr. Free Drugs for Fogies? Mr. Amnesty for Illegals Everywhere? Give me a freaking break. He's been much less bad than Kerry would have been, and he does at least have a sack between his legs. But he's no freaking George Washington.
(Not that George Washington was perfect, either. He provoked the Whiskey Rebellion primarily to flex his military muscles and prove that the federal government had some teeth.)
It's impossible for God to covet when He owns it all already.
Hate to tell you this, but arguing with him, well, let me use another Biblical reference, is Onanism.
When Fran hit here, the stores limited quantity on generators.
And just how is he going to get gas when he pulls into a station and that station is out of gas altogether because they didn't raise prices?
Oh wow, watch yourself get jumped on
Yes it is their self gratification. It sure ain't God's.
At the very most logical extreme you do not have any proof of that.
What part of, "It was your house, and after you sold it it was your money, so why would you lie," don't you get? It was their house. It was their money. Peter only condemns one thing: their decision to lie. Quite clear, really.
I would conjecture that, if they'd handed over half honestly, they might have been admonished that "God can give much more than this" [2 Chr. 25:9], or that "God loves a cheerful giver," [2 Cor. 9:7], or that "the love of money is the root of all evil" [1 Tim 6:10], but your theory that they'd have been put to death for that decision would certainly need to be proven from scripture. Your assumption has no power to convince without proof. They were put to death for lying, is what the Bible says.
Thus demonstrating that the system works! :-)
And so what, it will be high enough that the gas he can get, won't get him anywhere. So instead of one citizen being able to get gas and leave the hellhole and two that have to wait for buses, we have three citizens who can't leave the hellhole.
You sound like a Soviet Commissar defending the long lines for daily bread in the old Soviet Union. "Once everyone has their loaf of bread, the lines will disappear."
"Your money" means they had responsibility for it. It wasn't somebody else's money they were lying about. Peter does not point out the lie as the only sin, incidentally, only as the sin which brought about their death.
You raise a strawman.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.